Petty Cash Fund Question!

[Accounting Student]

Hello everyone,

I'm a college student working towards a BBA in Accounting. I hope someone here could help me better understand a homework question regarding petty cash funds as follows:

Loucks Company established a $200 petty cash fund on October 2, 2013. The fund is replenished at the end of each month. At the end of October 2013, the fund contained $37 in cash and the following receipts:


Office supplies $ 76
Lunch with client 48
Postage 20
Miscellaneous 19

To establish the petty cash fund I understand cash most be cr from the cash account and dr to the petty funds acount, but then why is it that to replenish the petty cash fund the correct entry is to dr expenses and cr cash? Shouldn't there be a double entry like:

dr Office supplies $ 76
Lunch with client 48
Postage 20
Miscellaneous 19
cr Petty Cash 163

dr Petty Cash 163
cr cash 163

Is it just so obvious that two entries would be redundant or is there something else I'm missing?

 

[anonymer]

hi accounting student, in my opinion the entry is correct. the second entry is to replenish the Petty Cash. Since its only balance is as of Oct 2013 is $37, there is a need to replenish it so it would be $200 again. Thus, the entry Dr Petty Cash Fund, Cr Cash for $163. i hope this helped

 

[kirby]

To : Acctg Student
You are correct. Making two entries is redundant so we don't do that. That means the only times you will see an entry to the petty cash account are
1) to establish it
2) to increase or decrease how much the fund is to hold
3) to close it