A petty cash fund of $100 is replenished when the fund contains $4 in cash and receipts for $93.The entry to replenish the fund would

Question

Quizplus · Accepted Answer

When replenishing a petty cash fund, the total amount of receipts is added to the amount of cash in the fund, and this total amount is debited to various expense accounts (such as office supplies, postage, etc.) based on the receipts. The petty cash fund is then credited for the same amount. In this case, the total amount of cash and receipts is $97 ($4 in cash + $93 in receipts), so the entry would be to debit the various expense accounts for $97 and credit the petty cash fund for $97. Since the original fund was for $100, but only $97 was actually used, there is a $3 overage. This overage is debited to the Cash Over and Short account, as it represents an expense that was not originally accounted for. Therefore, the correct answer is to debit Cash Over and Short for $3 (choice C).

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