For Establishing and Maintaining a Petty Cash Fund,which of the Following

question 147

Multiple Choice

For establishing and maintaining a petty cash fund,which of the following procedures should NOT be followed?

• A) A cheque is prepared for a small, fixed amount; when the cheque is cashed, the money is entrusted to a petty cash custodian.
• B) The company obtains the cash needed for the fund; an entry is then recorded 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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Definitions:

Growth Rate

The measure of the increase in a particular variable, such as GDP or population size, over a specific period of time, usually expressed as a percentage.

Nominal GDP

The gross domestic product measured in current market prices, without adjustment for inflation.

Real GDP

The total market value of all final goods and services produced in an economy in a year, adjusted for inflation, reflecting the actual economic output.

Changes

Alterations or modifications in conditions, situations, or in the state of affairs.