Question

Assume that the custodian of a $450 petty cash fund has $62 in coins and currency plus $383 in receipts at the end of the month. The entry to replenish the petty cash fund will include: A. A debit to Cash for $378. B. A debit to Cash Over and Short for $5. C. A debit to Petty Cash for $383. D. A credit to Cash for $383. E. A credit to Cash Over and Short for $5.

Answer 1

Answer:

B. A debit to Cash Over and Short for $5.

Explanation:

Preparation to determine what The entry to replenish the petty cash fund will include:

Dr Expenses $383

Dr Cash Over and Short $5

[$450-($383+$62)]

Cr Cash $388

($383+$5)

(To replenish petty cash fund)

Cash shortage=$450 - $62 - $383

Cash shortage= $5.00

Reimbursement and credit to cash=$383+$5.00 Reimbursement and credit to cash= $388

Therefore The entry to replenish the petty cash fund will include: A debit to Cash Over and Short for $5