Question

Havermill Co. establishes a $270 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $75 for Office Supplies, $141 for merchandise inventory, and $24 for miscellaneous expenses. The fund has a balance of $30. On October 1, the accountant determines that the fund should be increased by $54. The journal entry to record the reimbursement of the fund on September 30 includes a:a. Debit Cash $270; credit Petty Cash $270.
b. Debit Petty Cash $270; credit Accounts Payable $270.
c. Debit Miscellaneous Expense $270; credit Cash $270.
d. Debit Petty Cash $270; credit Cash $270.
e. Debit Cash $270; credit Accounts Payable $270.

Answer 1

Answer:

Hi there!

C. Debit Miscellaneous Expense $270; credit Cash $270.

Explanation:

At the time of the reimbursement from the petty cash, the vouchers for the money used are presented and these must be charged to the different expenses incurred.

In October 1, the journal entry for the petty cash increase of $54 will be:

Debit Petty Cash $54; credit cash $54.