Florida General Contractor Practice Exam

What should Ann replace when she takes money from petty cash?

1. Funds from her personal account

2. Receipts and documentation for expenses

3. Bank loans

4. No replacement is necessary

The correct answer is: Receipts and documentation for expenses

When Ann takes money from petty cash, it is essential for her to replace it with receipts and documentation for expenses. This process is crucial because it allows her to maintain accurate financial records, ensuring that all expenses are accounted for and can be justified if needed. Receipts provide evidence of the transactions that occurred, detailing what the money was spent on, which is important for both budgeting and auditing purposes. Additionally, proper documentation helps to prevent misuse of the petty cash fund and reinforces a system of accountability. By replacing the withdrawn cash with receipts, Ann contributes to transparent business practices, minimizing the risk of discrepancies in financial reporting.