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​ $10B. debit to Cash Short​ & Over for​ $10C. debit to Cash Short​ & Over for​ $25D. credit to Cash Short​ & Over for​ $25

Answer 1

Answer:

A. credit to Cash Short​ & Over for​ $10

Explanation:

Petty Cash is used to pay the daily expenses of the business. This cash is issued and settled against the expenses tickets received. Sometime cash is calculated as short & over.

Cash to be reimburse = $200 - $35 = $165

Total value of Tickets = $130 + $45 = $175

Cash Short / over = Total of Cash tickets - Cash to be reimburse = $175 - $165 = $10

Cash balance is over from the balance in the petty cash by $10.

Journal Entry is as follow

DR.  Office expense               $130

DR.  Entertainment Expense $45

Cr.   Cash short & over          $10

Cr.   Cash ($200 - $35 )         $165