If a petty cash fund is established in the amount of $250, and contains $153 in cash and $94 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

Question

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The correct journal entry to replenish the petty cash includes crediting Cash for $97. This is because the petty cash currently has $153 in cash and $94 in receipts, totaling $247. The fund should have $250, so an additional $3 is needed to bring the total to $250. However, the replenishment is for the amount spent ($94 in receipts), plus the discrepancy ($3), totaling $97 to bring the fund back to its original amount.

If a Petty Cash Fund Is Established in the Amount