Question

The entry to record the expenses paid for with petty cash is: Select one: O a. debit cash, credit petty cash b. debit expenses, credit petty cash C. debit expenses, credit cash d. debit petty cash, credit expenses be here to search ні е

Answer 1

Solution :

The entry to record the expenses paid for with petty cash is

Expenses a/c Dr.

                 To Petty Cash a/c

Expense account is a nominal account. As per the nominal account principle we “ Debit all expenses and losses ; Credit all Incomes and Gains “

Thus Expense account is debited.

Petty cash account is a Real account. As per the Real account principle we “ Debit what comes in ; Credit what goes out “.

Since cash is going out to pay for the expenses, the Cash account is credited.

The solution is Option b. debit expenses, credit petty cash