Spencer 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 journal entry to record the reimbursement of the petty cash fund should include a debit to the appropriate expense accounts (i.e. Delivery Expenses for $43 and Miscellaneous Expenses for $12) and a credit to the Petty Cash account for $200. The total credit should equal the total amount of the receipts, which is $182 in this case ($43 + $12 + $127). Therefore, the correct answer is B – Credit to Cash for $182. The other options are not necessary for the journal entry.