A petty cash fund of $100 is replenished when the fund contains $5 in cash and receipts for $91. The entry to replenish the fund would

Question

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When replenishing a petty cash fund, the total of the receipts is debited and the amount of cash disbursed is credited to the fund account. In this case, the total of the receipts is $91 and the remaining cash in the fund is $5, for a total of $96. Since the original fund amount was $100, there is an overage of $4. This overage is debited to the Cash Over and Short account, as it represents a loss to the company. Therefore, the correct entry to replenish the fund is to debit the appropriate expense accounts for the $91 in receipts, credit the petty cash fund for the total amount of cash disbursed ($96), and debit Cash Over and Short for the $4 overage. Choice C is the correct answer.

A Petty Cash Fund of $100 Is Replenished When the Fund