If a petty cash fund is established in the amount of ₤250, and contains ₤145 in cash and ₤100 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to which of the following accounts?
A) Petty Cash, ₤100.
B) Petty Cash, ₤105.
C) Cash, ₤100; Cash Over and Short, ₤5.
D) Cash, ₤105.

Question

Quizplus · Accepted Answer

The journal entry to replenish a petty cash fund should include a credit to Cash for the total amount replenished, which in this case is ₤105 (₤145 cash plus ₤100 receipts). Therefore, choice D is the correct answer. Choices A and B are incorrect because they do not include the full amount of the replenishment. Choice C is incorrect because it assumes there is a cash over or short, which is not mentioned in the problem.

If a Petty Cash Fund Is Established in the Amount