The entry to establish a petty cash fund includes:

The entry to establish a petty cash fund includes: a debit to Cash and a credit to Petty Cash. a debit to Cash and a credit to Cash Over and Short. a debit to Petty Cash and a credit to Cash. a debit to Petty Cash and a credit to Accounts Receivable. a debit to Petty Cash and a credit to Petty Cash Payable.

Answer

a debit to Petty Cash and a credit to Cash. Petty Cash is the small amount of cash dedicated to carry out small amount expenses of enterprise.Petty cash is also in the nature of cash as well as current asset.So, when petty cash fund is established petty cash balance is increased and cash balance is decreased.As per the accounting rule, when asset is increased it is debited and credited when asset is decreased.

So, Petty cash will be debited and Cash will be credited.

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