Which of the Following Procedures Is Incorrect for Establishing and Maintaining

question 202

Multiple Choice

Which of the following procedures is incorrect for establishing and maintaining a petty cash fund?

• A)A check is prepared for a small, fixed amount; when the check is cashed, the money is entrusted to a petty cash custodian.
• B)The company must obtain the cash needed for the fund and record an entry for the establishment of the fund.
• C)When appropriate documentation is presented, cash payments are made from the fund; the petty cash custodian retains the documentation.
• D)When the petty cash fund needs to be replenished, an entry is recorded to recognize an increase in the petty cash account.

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