The journal entry to replenish the fund on January 31 is:

A) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Petty cash,$324.
B) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Cash,$324.
C) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Cr.Cash over and short,$4; Cr.Petty cash,$316.
D) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Cr.Cash over and short,$4; Cr.Cash,$316.
E) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Petty cash,$400.

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Melissa Rowedder · Accepted Answer

Final Answer : D, Explanation :  The total expenses accounted for are $110 (office supplies) + $140 (merchandise inventory) + $70 (miscellaneous expenses) = $320. The cash overage of $4 is treated as a credit to Cash Over and Short because it's an unexpected gain. The total replenishment amount is $320, not $324, because the overage means less cash is needed to replenish the fund back to its original amount. Therefore, the correct entry is to debit the expenses and the overage, and credit cash for the total amount spent, which is $320, not including the overage.

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