Question

A petty cash fund was established with a $380 balance. It currently has cash of $42...

A petty cash fund was established with a $380 balance. It currently has cash of $42 and petty cash tickets totaling $338. Which of the following would be included in the entry to replenish the fund?

A. a credit to Petty Cash for $338

B. a debit to Petty Cash for $42

C. a credit to Cash for $42

D. a credit to Cash for $338

Business   Accounting   
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Homework Answers

Answer #1

Correct Answer ----- D. a credit to Cash for $338

Explanation

Journal entry to replenish petty cash fund will be as follows

General Journal

Debit

Credit

Petty cash

$ 338.00

                 Cash

$ 338.00

(Cash deposited to petty cash )

Petty cash is debited when cash is received from company to replenish its balance. Generally petty cash hold a particular amount of balance and when this balance gets short, it is filled with a deposit in petty cash.

A Debit to petty cash and Credit to Cash by $338 means petty cash will come back to $380 and all expenses done by petty cash account are reimbursed.

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