Havermill Co. establishes a $360 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $84 for Office Supplies, $159 for merchandise inventory, and $33 for miscellaneous expenses. The fund has a balance of $84. On October 1, the accountant determines that the fund should be increased by $72. The journal entry to record the establishment of the fund on September 1 is:
A. Debit Cash $360; credit Accounts Payable $360.
B. Debit Cash $360; credit Petty Cash $360.
C. Debit Petty Cash $360; credit Cash $360.
D. Debit Petty Cash $360; credit Accounts Payable $360.
E. Debit Miscellaneous Expense $360; credit Cash $360.
Answer: C
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