Final answer:
The process to replenish a $200 petty cash fund with $32 in cash and $172 in receipts involves creating a journal entry that debits the various expenses and credits the main cash account by $172, thus resetting the fund to its original amount.
Step-by-step explanation:
The question pertains to the procedure of replenishing a petty cash fund in accounting. In such a scenario, where a $200 petty cash fund shows a physical cash balance of $32 and has receipts totaling $172, a journal entry is required to replenish the fund back to its original balance. Since receipts account for the amount spent from the petty cash, which totals $172, these expenditures need to be accounted for. The replenishment process involves debiting various expenses based on the receipts (such as office supplies, postage, etc.) and crediting the main cash account by the total amount spent, which in this case is $172. This restores the petty cash fund to its initial balaance of $200 once the fund is topped up by the corresponding amount. Here is how a typical journal entry would look:
- Various Expenses (summarized from receipts) - debit $172
- Cash - credit $172
Note that the actual journal entries would be more detailed, listing each expense category as per the receipts. However, petty cash funds are generally replenished to offset the expenses incurred, and the main cash account is credited, not debited, upon replenishment.