When a Petty Cash Fund Is in Use

question 197

Multiple Choice

When a petty cash fund is in use:

• A)Expenses paid with petty cash are recorded only when the fund is reimbursed.
• B)Petty Cash is debited when funds are reimbursed.
• C)Petty Cash is credited when funds are reimbursed.
• D)Expenses are not recorded.
• E)Cash is debited when funds are reimbursed.

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Definitions:

Budgeted Variable Factory Overhead

The standard variable overhead for the actual units produced.

Standard Variable Overhead

The budgeted, or standard, cost associated with variable overheads that change with the level of production activity.

Actual Units Produced

refers to the tangible count of items manufactured during a specific period in a production facility.

Variances

The difference between planned, budgeted, or standard costs and actual costs, often analyzed to understand and improve business performance.