Question

A petty cash fund of $100 is replenished when the fund contains $5 in cash and receipts for $93. The entry to replenish the fund would?

A. Credit cash over and short for $2
B. Credit miscellaneous revenue for $2
C. Debit cash over and short for $2
D. Debit miscellaneous Expense for $2

Answer 1

Debit cash over and short for $2, because this entry accounts for the $2 discrepancy when replenishing the petty cash fund. Hence, the correct answer is option (C).

Step-by-step explanation:

The student's question pertains to the replenishment of a petty cash fund in accounting. When the fund contains $5 in cash and receipts for $93, this indicates that $95 was spent from the initial $100 fund ($5 remaining + $93 receipts = $98, not the original $100). The missing $2 is the discrepancy between the actual cash and receipts and the expected $100 of the fund. The correct journal entry would be:

• Debit various expenses for $93 (total of receipts)
• Debit cash over and short for $2 (the discrepancy)
• Credit cash for $95 (to replenish the fund)

Therefore, the answer to the student's question is C. Debit cash over and short for $2.