CCD Co. has a petty cash account which was established at the amount of $100 and prepares
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Question:
CCD Co. has a petty cash account which was established at the amount of $100 and prepares a balance sheet. Before preparing the balance sheet, Joe, the accountant, looks in the petty cash box and sees only $10 in currency. He added the ten dollars to the General Ledger balance for Cash to get his appropriate number for Cash on the Balance Sheet.
Joe has followed GAAP
None of the above
Joe has broken two GAAP rules here but they counteract each other so the ultimate effect is that cash on the balance sheet is correctly stated.
We need more information to decide whether there has been a GAAP violation.
Joe has violated GAAP
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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