Recall on February 1, Derrick Company established a $200 petty cash fund. On February 15, when the fund balance reached $7, the petty cash custodian prepared a petty cash report that summarized receipts for postage ($140) and printing ($54). Complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus.

Answer with its Explanation:

The double entry to record the postage expenses of $140 and the printing expense of $54 is as under:

Dr Postage Expenses        $140

Dr Printing Expenses         $54

Cr Petty Cash Account                       $193

Cr Cash Over and Short Account      $1

According to the summarized Report, the cash at hand is $7 which must be $6 ($200 - $194). This difference can adjusted in Cash Over and Short Account which is used to adjust minor differences in cash balance.

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