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ACCA Applied Knowledge · Financial Accounting · Cash

A company's petty cashier records a $35 payment for stationery and a $20 payment for postage from the imprest float. Which double entry is made when the float is later reimbursed by cheque for these two items only?

Debit petty cash $55 and credit bank $55. The reimbursement simply moves cash from the bank to the petty cash box to restore the float. Expenses for stationery and postage are posted from the petty cash book when spent, so they are not posted again.

  1. ADebit petty cash $55; credit bank $55Correct
  2. BDebit stationery $35, debit postage $20; credit petty cash $55
  3. CDebit bank $55; credit petty cash $55
  4. DDebit petty cash $55; credit stationery $35 and postage $20

Explanation

Reimbursement restores cash to the float: debit petty cash and credit bank with $55. The expense accounts were already debited from the petty cash book when the payments were recorded, so they are not touched again. Option 2 would double-count the expenses.

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