Petty Cash Replenishment: Restore the Fund
Quick answer
Petty cash replenishment restores a fixed fund: authorized fund minus cash counted equals the cash needed. Record the receipt accounts and any cash difference; credit Cash. Ordinary replenishment leaves the Petty Cash ledger balance unchanged.
Reviewed . Original CPAPass exercises.
1. Count cash and total the receipts
Juniper Studio has a $600 fund. Before replenishment, the custodian counts $92 and supplies these receipts:
Postage $186 + delivery $214 + consumed supplies $92 = $492. Cash plus receipts accounts for $584, leaving a $16 shortage.
Assume valid receipts, all purchases expensed, and no earlier entries for these vouchers. The authorized fund stays $600. The $92 supplies receipt and $92 cash count are separate inputs despite matching amounts.
2. Calculate the replenishment amount
The check must replace the cash missing from the box: $600 - $92 = $508. That includes $492 supported by receipts and the $16 shortage.
Check the physical result: $92 already in the box + $508 added = $600. A $492 check would leave only $584, so reimbursing receipts alone would not restore this fund.
Quick check: Cash is actually $108, with the same $492 receipts and $600 fund. How much should be replenished?
Check the replenishment amount
$492. Cash plus receipts now equals $600, so there is no shortage. The cash count changed the answer even though the receipt total stayed the same.
3. Record the replenishment entry
For the original $92 cash count, record the documented expenses and the shortage:
| Account | Debit | Credit |
|---|---|---|
| Postage Expense | $186 | - |
| Delivery Expense | $214 | - |
| Supplies Expense | $92 | - |
| Cash Short and Over | $16 | - |
| Cash | - | $508 |
Debits total $508, matching the Cash credit. Cash here means the checking account paying the replenishment check. The petty cash box receives that money, but the ledger account Petty Cash remains $600.
The two checks answer different questions: $92 + $492 + $16 reconciles the fund before replenishment; $186 + $214 + $92 + $16 balances the entry against the $508 bank payment.
4. Separate replenishment from a fund increase
If management separately raises the restored fund from $600 to $700, debit Petty Cash $100 and credit Cash $100. Only this authorized increase changes the fund balance.
Keep the events separate: first restore the $600 fund, then add $100. A question combining both events would require $608 from the bank, but only $100 is a debit to Petty Cash.
Do not automatically debit every receipt to an expense in other questions. Follow its account classification; this example explicitly assumes the supplies were consumed.
5. Try an original FAR-style question
A $450 fund has $77 cash and $381 valid expense receipts. No entries have been made for the receipts, and the fund size stays fixed. Which replenishment amount and entry treatment are correct?
- A. $373; credit Cash Short and Over $8
- B. $381; no Cash Short and Over entry
- C. $389; debit Cash Short and Over $8
- D. $373; debit Petty Cash $373
Reveal the answer and explanations
A. Replenish $373: $450 - $77. Cash plus receipts totals $458, an $8 overage. Debit expenses $381; credit Cash $373 and Cash Short and Over $8.
- B uses receipts alone. Adding $381 would leave $458 cash in the box, exceeding the authorized fund.
- C reverses the overage. The $8 excess reduces the check from $381 to $373; it does not increase it to $389.
- D gets the check amount right but increases the Petty Cash ledger. Replenishment records expenses and the difference, not a new fund authorization.
Check your method
- Subtract counted cash from the fund.
- Compare cash plus receipts with the fund.
- Balance the entry without changing Petty Cash.
Common petty cash questions
What is the replenishment formula?
Authorized fund minus physical cash counted. In the example, $600 minus $92 requires a $508 check.
Why not credit Petty Cash?
The checking account supplies the money. Ordinary replenishment credits Cash while the fixed Petty Cash ledger balance stays unchanged.
Does a shortage change the check?
Yes. Here the $16 shortage makes the check $508 even though receipts total $492.
How is an overage recorded?
Credit Cash Short and Over. In the practice question, $381 expense debits balance $373 Cash and $8 Cash Short and Over credits.
Related FAR study
- Bank reconciliationReconcile bank and book balances.
- Cash equivalentsClassify qualifying instruments.
- FAR study topicsPlan your wider FAR study.
Scope and sources
FAR12 covers cash balances and unreconciled cash, but does not name petty cash. This connection is an educational inference. Blueprint effective January 2026; OpenStax published April 11, 2019. Other source revision dates are not shown. Reviewed September 16, 2026. Exercises are original, not AICPA questions.