Question

The opening balance of Petty Cash at the
Branch is Rs. 2,000, the Amount received from
the Head Office for Petty Expenses
Rs. 10,000, the closing balance of Petty Cash is
Rs. 3,000; Which of the following is the right
answer under the Debtors System?
Branch​

Answer 1

Cash Basis System:

When Branch sells Head Office s Goods for cash only:

Under this method, the goods which are sent by the Head Office are sold by the branch only for cash and the proceeds are deposited into the local bank by the branch at the end of the day/week/month for credit to Head Office. The expenses of the branch are met by the Head Office. The branch is not allowed to make any expenses except some petty expenses for which a Petty Cash Book is maintained by the branch to keep records

Answer 2

Answer:

Opening Petty Cash Balance (1500) + Petty Cash Received (___________________ ) - Petty Expenses Paid (2000) = Closing Petty Cash Balance (800) *