A petty cash fund was established with a $525 balance.It currently has cash of $35 and petty cash tickets as shown below: $$\begin{array} { | l | r }
\hline \text { Travel expense } & \$ 105 \
\hline \text { Office supplies expense } & 250 \
\hline \text { Equipment rental expense } & 100 \
\hline
\end{array}$$ Which of the following would be included in the journal entry to replenish the Petty Cash fund?
A) debit to Cash Short & Over for $35
B) credit to Cash Short & Over for $35
C) debit to Petty Cash for $35
D) credit to Petty Cash for $35

Question

A petty cash fund was established with a $525 balance.It currently has cash of $35 and petty cash tickets as shown below: $$\begin{array} { | l | r } 
\hline \text { Travel expense } & \$ 105 \
\hline \text { Office supplies expense } & 250 \
\hline \text { Equipment rental expense } & 100 \
\hline
\end{array}$$ Which of the following would be included in the journal entry to replenish the Petty Cash fund?
A) debit to Cash Short & Over for $35
B) credit to Cash Short & Over for $35
C) debit to Petty Cash for $35
D) credit to Petty Cash for $35

Quizplus · Accepted Answer

BThe total of the petty cash tickets is $455 ($105 for travel expense, $250 for office supplies expense, and $100 for equipment rental expense), and the current cash on hand is $35. The original balance of the petty cash fund was $525. To replenish the fund back to its original balance, you would need to add $490 ($525 original balance - $35 current cash). The difference between the total of the tickets ($455) and the amount needed to replenish ($490) is $35, which indicates a shortage. Therefore, you debit Cash Short & Over for the shortage ($35) and credit Cash or Cash in Bank for the replenishment amount ($490), not directly affecting the Petty Cash account in the replenishment process.

A Petty Cash Fund Was Established with a $525 Balance