Question

Spencer Co. has a $350 petty cash fund. At the end of the first month the accumulated receipts represent $58 for delivery expenses, $187 for merchandise inventory, and $27 for miscellaneous expenses. The fund has a balance of $78. The journal entry to record the reimbursement of the account includes a:

A. Credit to Cash for $272.
B. Credit to Cash Over and Short for $78.
C. Debit to Cash Over and Short for $78.
D. Debit to Petty Cash for $350.
E. Credit to Inventory for $187.

Answer 1

Answer: Option (A) is correct.

Explanation:

Given that,

petty cash fund = $350

accumulated receipts for delivery expenses = $58

merchandise inventory = $187

miscellaneous expenses = $27

fund has a balance = $78

Therefore,

The journal entry for the reimbursement of the account is as follows:

Delivery expenses A/c             Dr. $58

Merchandise inventory A/c      Dr. $187

Miscellaneous expenses A/c    Dr. $27

To Cash A/c                                                   $272

(To record petty cash reimbursement)

Answer 2

Answer:

A. Credit to Cash for $272.

Explanation:

The journal entry for the reimbursement of the account is as follows:

Delivery expenses A/c             Dr. $58

Merchandise inventory A/c      Dr. $187

Miscellaneous expenses A/c    Dr. $27

To Cash A/c                                                   $272