multiple choice question at the end of the month, abc co.s petty cash fund contains $4 in cash and receipts…

multiple choice question at the end of the month, abc co.s petty cash fund contains $4 in cash and receipts for postage of $50 and delivery expenses of $44. it started out with $100 in the fund at the beginning of the month. demonstrate the journal entry to replenish the account and recognize its shortage by choosing the correct action from those given below. cash is credited for $96. petty cash is debited for $96. cash is credited for $94. cash is credited for $98.

multiple choice question at the end of the month, abc co.s petty cash fund contains $4 in cash and receipts for postage of $50 and delivery expenses of $44. it started out with $100 in the fund at the beginning of the month. demonstrate the journal entry to replenish the account and recognize its shortage by choosing the correct action from those given below. cash is credited for $96. petty cash is debited for $96. cash is credited for $94. cash is credited for $98.

Answer

Explanation:

Step1: Calculate total expenses

The total of postage and delivery expenses is $50 + 44=$94$.

Step2: Determine shortage

The petty - cash fund started with $100$ and ended with $4$ in cash. The amount that should be in the fund to replenish it to the original $100$ is $100 - 4=$96$. Since the actual expenses are $94$, there is a shortage of $96-94 = 2$.

Step3: Analyze journal - entry for replenishment

To replenish the petty - cash fund, we need to credit Cash for the amount needed to bring the fund back to its original balance. The amount of cash needed to replenish the fund is $96$. In a journal entry to replenish a petty - cash fund, Cash is credited for the amount of the replenishment.

Answer:

Cash is credited for $96.