Use the following information regarding Larson Company to answer the question below.
1)Established a petty cash fund in the amount of $250.
2)Reimbursed the petty cash fund given the following petty cash fund disbursements:
A.Payment for postage,$20.
B.Payment for supplies,$70.
3)Increased the petty cash fund to $300.
4)Cash over at the end of the first period was $5.
The entry to record the reimbursement of the petty cash fund would include a
A)credit to Postage Expense for $20.
B)debit to Petty Cash for $90.
C)credit to Cash for $85.
D)debit to cash for $5.

Question

Use the following information regarding Larson Company to answer the question below. 
1)Established a petty cash fund in the amount of $250.
2)Reimbursed the petty cash fund given the following petty cash fund disbursements:
A.Payment for postage,$20.
B.Payment for supplies,$70.
3)Increased the petty cash fund to $300.
4)Cash over at the end of the first period was $5.
The entry to record the reimbursement of the petty cash fund would include a
A)credit to Postage Expense for $20.
B)debit to Petty Cash for $90.
C)credit to Cash for $85.
D)debit to cash for $5.

Quizplus · Accepted Answer

The reimbursement entry would include a credit to Cash for the total amount disbursed from the petty cash fund, which is $90 ($20 for postage + $70 for supplies). However, since there is a cash over of $5, the actual cash needed to replenish the fund is $85.

Use the Following Information Regarding Larson Company to Answer the Question