Childers Company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $400. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts:

December 4 Freight charge for merchandise purchased $ 62

December 7 Delivery charge for shipping to customer $ 46

December 12 Purchase of office supplies $ 30

December 18 Donation to charitable organization $ 51

If, in addition to these receipts, the petty cash fund contains $201 of cash, the journal entry to reimburse the fund on December 31 will include:

A. A debit to Transportation-In of $62.

B. A credit to Cash of $199.

C. A debit to Petty Cash of $189.

D. A credit to Cash Over and Short of $10.

E. A credit to Office Supplies of $30.

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Business

23 August, 18:34

Childers Company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $400. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts:

December 4 Freight charge for merchandise purchased $ 62

December 7 Delivery charge for shipping to customer $ 46

December 12 Purchase of office supplies $ 30

December 18 Donation to charitable organization $ 51

If, in addition to these receipts, the petty cash fund contains $201 of cash, the journal entry to reimburse the fund on December 31 will include:

A. A debit to Transportation-In of $62.

B. A credit to Cash of $199.

C. A debit to Petty Cash of $189.

D. A credit to Cash Over and Short of $10.

E. A credit to Office Supplies of $30.

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Answers (1)

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Tomcat · Answer 1

Answer: C. A debit to Petty Cash of $189.

Explanation: from the above question, the total amount given out of the petty cash is $189. That is why we are reimbursing the petty cash with $189.

In Accounting, the receiving account is debited while the giving account is credited. That is why we will reimburse the petty cash account by Debiting the petty cash account with $189 and crediting the bank with $189.