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The Journal Entry to Open a New Petty Cash Fund

question 80

True/False

The journal entry to open a new petty cash fund includes a debit to the petty cash account and a credit to cash in bank.


Definitions:

Levered Firm

A company that utilizes debt financing along with equity financing in its capital structure.

Unlevered Value

The value of a firm that is not affected by the decisions of financing, such as the use of debt.

Tax Rate

The fraction of earnings or profits that is subject to taxation for individuals or companies.

Total Debt

The sum of all liabilities and financial obligations a company owes.

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