A petty cash fund was established with a $200 balance. It currently has cash of

Question

A petty cash fund was established with a $200 balance. It currently has cash of $35 and petty cash tickets as follows: Office expense $130 and Entertainment Expense $45. Which of the following would be included in the journal entry to replenish the Petty Cash fund?

A.

credit to Cash Short & Over for $10

B.

debit to Cash Short & Over for $10

C.

debit to Cash Short & Over for $25

D.

credit to Cash Short & Over for $25

If the bank reconciliation includes a deposit in transit, a journal entry is required that includes a debit to cash.

True

False

The journal entry to replenish a petty cash fund includes a debit to the Petty Cash account and a credit to the proper expense account(s).

True

False

Explanation / Answer

Cash shortage is = Fund Maintained - Fund balance - Expenses = 200-35-130-45 = - 10

Cash shortage is Debited to Cash short and Over for $ 10.

Answer is option b).

Deposit in transit - no entry is required to be posted, as this was neither recorded in books as cash received not no deposit of cash was recorded in bank as it was in transit.

So given statement is False.

Journal entry to Replenish petty cash account :-

Petty Cash Dr XXXXX

To Cash XXXXX

Cash account is creditted, not the expense account. Given statement is False.

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