Question

A $197 petty cash fund has cash of $53 and receipts of $184. The journal entry to replenish the account would include a

A)credit to Petty Cash for $144.

B)debit to Cash for $144.

C)credit to Cash Over and Short for $40.

D)credit to Cash for $184.

Answer 1

A $197 petty cash fund has cash of $53 and receipts of $184. The journal entry to replenish the account would include a

A)credit to Petty Cash for $144.: Replenishment of Petty cash is done with credit to Cash not petty cash, hence INCORRECT.

B)debit to Cash for $144.: Replenishment of petty cash involved CREDIT to cash not debit, hence INCORRECT

C)credit to Cash Over and Short for $40.: This is correct as Cash $53+receipts $184 is higher by $40 than $197.

D)credit to Cash for $184.: Credit to cash will be equal to $144 ($197-$53), not $184, hence INCORRECT