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GCE Financial Accounting 1990 Question 32

Question 32

Petty Cash

The balance of the Petty Cash Book should be

  1. A.deducted from the balance of the Cash Account
  2. B.shown in the Balance Sheet as cash-in-hand
  3. C.reconciled with the bank balance
  4. D.returned to the Sales manager
  5. E.shown in the Balance Sheet as liability.
Show the answer and explanation

Answer: B (shown in the Balance Sheet as cash-in-hand)

Explanation

Petty cash left is cash the business holds, a current asset.