On March 1 Hsu Imports established a petty cash fund of 325

On March 1, Hsu Imports established a petty cash fund of $325. The journal entry to record the replenishment of the fund for $290 at the end of March includes: A debit to Petty Cash of $290. e A credit to Cash of $290. A debit to various expense of $35 No journal entry is required; journal entries are only needed when the petty cash fund is created or discontinued.

Solution

Ans is B A credit to cash of $290

Explanation: Option A is wrong since petty cash is debited only when petty cash fund is created afterwards for replenishment purpose various expenses is debited and cash is credited:

Various expense Dr 290

Cash Credit 290