Which statement best describes appropriate procedures for using a petty cash fund?

Using a petty cash fund properly is crucial for maintaining transparent and responsible accounting practices within any organization. The statement indicating that funds must be tracked with receipts and reconciled regularly is the best description of appropriate procedures for using a petty cash fund. This practice ensures that all expenditures are documented, enabling a clear audit trail that can be reviewed for accuracy and accountability.

Regular reconciliation of the petty cash fund helps identify any discrepancies that may arise, ensuring that the fund is managed responsibly and that the amounts available and spent are known at all times. This method protects the organization from misuse or mismanagement of funds and supports financial integrity. By tracking transactions through receipts, organizations also create a straightforward reference for expense reporting and financial audits.

In contrast, allowing funds to be used for any business purpose without oversight undermines financial controls and can lead to improper usage. Keeping records only when the fund is close to empty does not ensure proactive management of the funds, and allowing withdrawals to exceed the maximum limit set would go against established policies that are designed to manage cash flows effectively.