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

Which of the following is the correct journal entry to record the reimbursement of the petty cash fund when expenses have been incurred and paid from petty cash?

Debit Cash and credit Petty Cash

Debit Petty Cash and credit various expense accounts

Debit various expense accounts and credit Cash

Debit various expense accounts and credit Petty Cash

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Verified step by step guidance

Understand the purpose of the petty cash fund: It is a small amount of cash kept on hand to pay for minor expenses. When expenses are incurred and paid from petty cash, the fund needs to be reimbursed to maintain its balance.

Identify the accounts involved: Expenses incurred from petty cash are recorded in various expense accounts (e.g., Office Supplies Expense, Travel Expense). The reimbursement involves reducing the cash account since the petty cash fund is replenished.

Determine the correct journal entry: When reimbursing the petty cash fund, you need to debit the various expense accounts to record the expenses and credit the Cash account to reflect the reduction in cash used for reimbursement.

Avoid common mistakes: Do not debit the Petty Cash account during reimbursement. The Petty Cash account represents the fund's established balance, which remains unchanged unless the fund size is increased or decreased.

Prepare the journal entry: Debit the appropriate expense accounts (e.g., Office Supplies Expense, Travel Expense) for the amounts spent and credit the Cash account for the total reimbursement amount.