Which term refers to a fund used for small office purchases?

Which term refers to a fund used for small office purchases?

• A. Petty cash
• B. Credit
• C. Service charge
• D. Encounter form

Answer: (A)

Handling small office purchases is typically done with a petty cash fund. A petty cash fund is a small amount of cash kept on hand to cover minor items—like office supplies, postage, or a quick office errand—without writing a check or charging every small expense to a credit card. It’s set up with a custodian, a fixed initial amount, and a receipts-and-vouchers process. When the fund runs low, it’s replenished by submitting the receipts, restoring the original balance. The other terms don’t fit because credit refers to borrowed money used for transactions, a service charge is a fee for a service, and an encounter form is a billing document used in medical settings.

Handling small office purchases is typically done with a petty cash fund. A petty cash fund is a small amount of cash kept on hand to cover minor items—like office supplies, postage, or a quick office errand—without writing a check or charging every small expense to a credit card. It’s set up with a custodian, a fixed initial amount, and a receipts-and-vouchers process. When the fund runs low, it’s replenished by submitting the receipts, restoring the original balance. The other terms don’t fit because credit refers to borrowed money used for transactions, a service charge is a fee for a service, and an encounter form is a billing document used in medical settings.