Question

If a petty cash fund is established in the amount of $250, and contains $151 in cash and $94 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

a.Petty Cash, $94.
b.Petty Cash, $99.
c.Cash, $94; Cash Over and Short, $5.
d.Cash, $99.

Answer 1

d. Cash, $99.

Step-by-step explanation:

As we know that the cash total in petty cash account was $250, out of which in hand balance = $151

Now, that means the company has spent $250 - $151 = $99 as expenses involving petty cash.

This means that the company shall provide for such amount. Even though they have balance of expense to made = $94

But since this is minor amount and that the money is not in hand it shall be provided for, and it shall be reduced by the same amount, including unidentifiable money expense out.

Answer 2

b. Petty Cash, $99.

Step-by-step explanation:

The journal entries are shown below:

1. Petty cash A/c $250

To Cash A/c $250

(Being the petty cash fund is established)

2. Miscellaneous expense A/c Dr $94

Cash short and over A/c $5

To Petty cash A/c $99

(Being the expenses are recorded)

The Cash short and over is computed below:

= $250 - $151 - $94

= $5