If petty cash balance is 300 and we have receipts of total expenses 282.65 and cash on hand 25.2, how can we replenish petty cash?
Understand the Problem
The question is asking how to replenish petty cash given the current balance, total expenses accounted through receipts, and cash on hand. We will determine the amount needed to restore the petty cash to its original balance.
Answer
The replenishment amount is $R = P - C$.
Answer for screen readers
The amount needed to restore the petty cash is given by ( R = P - C ).
Steps to Solve
- Identify variables Let:
- ( P ) = Original Petty Cash Balance
- ( C ) = Current Cash on Hand
- ( E ) = Total Expenses Accounted
-
Calculate the amount spent To find how much money has been spent from the petty cash, we can calculate this as:
$$ S = P - (C + E) $$
Where ( S ) is the amount spent. -
Determine the amount needed to replenish To determine how much we need to add back to the petty cash to restore it to the original balance, we can use the following formula:
$$ R = P - C $$
Where ( R ) is the replenishment amount.
The amount needed to restore the petty cash is given by ( R = P - C ).
More Information
This replenishment process ensures that the petty cash system remains effective by keeping the allocated funds ready for use. It's essential for maintaining accurate records and cash flow.
Tips
- Confusing total expenses with current cash on hand. Make sure to clearly separate these figures.
- Forgetting to account for both the cash on hand and total expenses when calculating the replenishment amount.
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