Entries are made to the petty cash account when:

• A. a check is written for a large purchase
• B. petty cash is counted at the end of the month
• C. petty cash is used to pay for minor expenses
• D. the petty cash fund is established or replenished

Answer: (D)

Verified step by step guidance

1. Understand the concept of petty cash: Petty cash is a small amount of cash kept on hand to pay for minor expenses that are impractical to pay by check or electronic transfer.
2. Recognize when entries are made to the petty cash account: Entries are typically made when the petty cash fund is established or replenished, not when individual minor expenses are paid.
3. Clarify the process of establishing the petty cash fund: When the fund is created, a check is written from the main bank account, and the amount is recorded as a debit to the petty cash account and a credit to the cash account.
4. Explain the replenishment process: At the end of a period (e.g., month), petty cash is counted, and receipts for expenses are reviewed. A check is written to replenish the fund back to its original balance, and the expenses are recorded in the appropriate accounts.
5. Highlight the importance of proper documentation: Ensure all petty cash transactions are supported by receipts and properly recorded to maintain accurate financial records.