The Entry at the End of the Month to Reimburse

question 32

Multiple Choice

The entry at the end of the month to reimburse the petty cash for the amount spent is which of the following?

• A) Debit petty cash asset; credit bank
• B) Debit bank; credit petty cash asset
• C) Debit petty cash asset; credit petty cash expenses
• D) Debit petty cash expenses; credit bank

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Definitions:

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Pretax Income

Income earned by a company before taxes are deducted, indicating the profitability of a company's core operations.

Sales Increase

The rise in the amount of products or services sold by a company, usually compared to a previous period.

Contribution Margin

The amount by which sales revenue exceeds variable costs, representing the contribution towards covering fixed costs and generating profit.