Havermill Co. establishes a $330 petty cash fund on September 1. On September 30

Question

Havermill Co. establishes a $330 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $81 for Office Supplies, $153 for merchandise inventory, and $30 for miscellaneous expenses. The fund has a balance of $66. On October 1, the accountant determines that the fund should be increased by $66. The journal entry to record the reimbursement of the fund on September 30 includes a:

Multiple Choice

Debit to Office Supplies for $81.

Credit to Merchandise Inventory for $153.

Credit to Cash for $330.

Debit Petty Cash for $264.

Credit to Cash for $66.

Explanation / Answer

The journal entry to record the reimbursement of the fund on September 30 includes a:

Debit to Office Supplies for $81.

This is so because the Co. has used $81 on the office supplies during december and than can be captured by debiting Office supplies account with amount of expense on it.

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