Ferguson Co.has a $200 petty cash fund.At the end of the first month the accumulated receipts represent $43 for delivery expenses,$127 for merchandise inventory,and $12 for miscellaneous expenses.The fund has a balance of $18.The journal entry to record the reimbursement of the account includes a:

Question

Quizplus · Accepted Answer

The $200 petty cash fund was initially given in cash and now the business needs to be reimbursed for the expenses that were paid out of it. The total expenses incurred in the month were $43+$127+$12=$182. Therefore, the journal entry to record the reimbursement of the account should include a credit to Cash for $182, which represents the amount of cash being given back to the petty cash fund. There is no need to debit the Petty Cash account or credit any other accounts such as Inventory or Cash Over and Short.