What journal entry would you record to replenish a petty cash fund?

What journal entry would you record to replenish a petty cash fund?

• A. Debit Cash in Bank; Credit Petty Cash for the replenishment amount.
• B. Debit Petty Cash; Credit Cash.
• C. Debit various expense accounts for receipts; Credit Cash or Cash in Bank for the total amount.
• D. Debit Cash; Credit Revenue.

Answer: (C)

When you replenish a petty cash fund, you’re recognizing the costs that were paid out of petty cash and funding the petty cash balance from the main cash account. After receipts are collected, you debit the specific expense accounts for the amounts shown on those receipts and you credit Cash or Cash in Bank for the total. This records that the company incurred those expenses and that cash was moved from the bank to restore the petty cash fund. This approach keeps expenses recognized and clearly shows the source of replenishment, aligning with how petty cash disbursements are accounted for.

When you replenish a petty cash fund, you’re recognizing the costs that were paid out of petty cash and funding the petty cash balance from the main cash account. After receipts are collected, you debit the specific expense accounts for the amounts shown on those receipts and you credit Cash or Cash in Bank for the total. This records that the company incurred those expenses and that cash was moved from the bank to restore the petty cash fund. This approach keeps expenses recognized and clearly shows the source of replenishment, aligning with how petty cash disbursements are accounted for.