A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts for $93. The entry to replenish the fund would
debit Cash Over and Short for $4.
credit Miscellaneous Revenue for $4.
credit Cash Over and Short for $4.
debit Miscellaneous Expense for $4.
The correct entry to replenish the petty cash fund would be:
Debit: Cash Over and Short for $4
Credit: Miscellaneous Expense for $4
The entry to replenish the petty cash fund would be:
Debit: Cash Over and Short for $4
Credit: Miscellaneous Expense for $4
To understand why this is the correct entry, let's break it down step by step:
1. Begin with the starting cash balance in the petty cash fund, which is $3.
2. Add the total amount of receipts, which is $93.
3. The total amount of cash plus receipts is $96.
4. Compare the total amount of cash plus receipts ($96) to the authorized amount in the fund ($100).
- In this case, the total is less than the authorized amount, resulting in a shortage.
- The shortage is calculated by subtracting the total ($96) from the authorized amount ($100), resulting in a shortage of $4.
5. Since there is a shortage, we need to debit the Cash Over and Short account for the amount of the shortage, which is $4.
6. To balance the entry, we credit the Miscellaneous Expense account for the same amount of $4 to reflect a loss due to the shortage in petty cash.
Therefore, the correct entry to replenish the fund is to debit Cash Over and Short for $4 and credit Miscellaneous Expense for $4.
Answer would be credit cash over short $4..
Credit means to put back and debit means to take away.
Petty cash is always replenished after moeny is used. If you used 93.00 and had 3.00 still in petty cash that would = 96.00 leaving the petty cash 4.00 unacountable for which is a shortage