Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

When a petty cash fund is replenished, which of the following journal entries is correct?

Debit Petty Cash and credit Cash

Debit Petty Cash and credit various expense accounts

Debit various expense accounts and credit Cash

Debit Cash and credit Petty Cash

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Verified step by step guidance

Understand the purpose of replenishing a petty cash fund: When petty cash is replenished, the goal is to account for the expenses incurred using the petty cash and restore the fund to its original balance.

Recognize that petty cash is not debited during replenishment: The petty cash account is only debited when the fund is initially established or increased. During replenishment, the expenses incurred are recorded instead.

Identify the correct accounts to debit: Expenses paid using petty cash are recorded by debiting the appropriate expense accounts (e.g., office supplies, travel expenses, etc.). This reflects the use of funds for specific purposes.

Determine the account to credit: The cash account is credited to show the reduction in the company's cash balance as funds are transferred to replenish the petty cash.

Prepare the journal entry: Debit the various expense accounts for the amounts spent and credit the cash account for the total amount replenished. This ensures proper accounting for the expenses and the cash outflow.