Question

The petty cash fund should be replenished for the a. total amount for which the account was originally set up. b. amount of receipts plus cash on hand. c. amount needed to bring the petty cash fund back to its established amount. d. amount of expenses estimated for the next period.

Answer 1

Solution 1)

Correct Answer : c) Amount needed to bring the petty cash fund back to its established amount.

Reason : A Petty Cash fund is replenished on periodic basis, it manages day to day expenses adn hence is reconciled at the end of the period and any replenished with the amount needed tp bring it back to its original established amount.

Solution 2)

Correct Answer : b) are expected to be converted to cash within three months.

Reason : Cash Equivalents are readily convertible into cash on short durations. These include Cash at Bank, Cash in Hand and Short term marketable securities.

Solution 3)

Correct Answer : c) is a credit reference letter written by the depositor's bank.

Reason : A Bank Statement is a letter produce by bank showing all the transactions during a given period.

Solution 4)

Correct Answer : Management's Philosophy and Operating style

Reason : Control Procedures, Risk assesment and Monitoring are elements of Internal Control, Hence Management's Philosophy and operating style.

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