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One of the differences between petty cash and a change fund is:
a) No further entries are made to the change fund once it is established.
Let's break it down:
- When petty cash is established, the cash account is credited to show the initial funding of the petty cash.
- However, in the case of a change fund, once it is established with an initial amount, no further entries are made to it. The change fund is used for making change during business transactions and does not involve replenishing or recording additional transactions after the initial setup.
Therefore, the correct difference is that for petty cash, ongoing entries are made as it is used and replenished, whereas for a change fund, no further entries are made once it is established.
