Pick a dollar amount you think will cover small office expenses for a month or so. Sign the check with your signature. For each school, make this account a Deposit Account.
Notice that the petty cash account is debited or credited only when the fund is established or when the size of the fund is increased or decreased, not when the fund is replenished. For control purposes, vouchers are sequentially prenumbered and signed by both the person requesting the cash and the custodian.
Whenever someone in the company requests petty cash, the petty cash custodian prepares a voucher that identifies the date, amount, recipient, and reason for the cash disbursement. The total of the expenditures and the amount of cash in the petty cash box should equal the total amount of cash you placed in the cash box.
When the fund requires more cash or at the end of an accounting period, the petty cash custodian requests a check for the difference between the cash on hand and the total assigned to the fund.
This would mean you cannot reconcile the petty cash expenses to actual receipts.
Give one person the key and the responsibility for using the cash and accounting for it. Include a description of the expenditure, the date and the amount of cash you used from the petty cash box.
You and the employee designated to oversee the fund should have the only keys. Write out the dollar amount in words on the appropriate line of the check.
Add up the expenditures on the journal as you use the petty cash. References Real Life Accounting; Replenishing Petty Cash; January About the Author Kathryn Hatter is a veteran home-school educator, as well as an accomplished gardener, quilter, crocheter, cook, decorator and digital graphics creator.
The amount will vary so leave it as zero.
However, this may be appropriate if you have only a few expenses to track each month. This article explains how to track petty cash including funds put into petty cash and expenses paid out.
If it was deposited, and then withdrawn, it would show up on your bank statement and would be included in your regular reconciliation process. Cash Withheld Cash withheld for the cash box should simply be deposited as a separate deposit to the Petty Cash account for each school.
Hatter has also had publication on home improvement websites such as Redbeacon. Petty cash is a small amount of cash that a business has on hand to quickly purchase miscellaneous small expenses. You will need to reconcile your petty cash account before you replace the money in it.
A journal entry that involves your bank account is included in the Bank Statement Reconciliation process. Even if you trust your employees, cash left out on a table or desk could be stolen by an office visitor or a customer. This will bring the petty cash total back up to the original total again.
If you have more than one school, create separate accounts for each school. Include a description of the expenditure, the date and the amount of cash you used from the petty cash box. Write another check to "Petty Cash" for the total amount of the expenditures.
The better choice is to write your own name rather than "cash" in the "Pay to the Order of" field so no one else can easily cash the check if it is lost or stolen before you reach the bank. Purchase a petty cash box and decide where you are going to keep it.
The journal entry to record the creation of a petty cash fund appears below.What does it mean to replenish the petty cash fund? It is important to point out that the $80 check will be credited to Cash (the company's checking account). No entry will be made to the Petty Cash account.
Related Questions. What is petty cash? What is a petty cash voucher? This article explains how to track petty cash including funds put into petty cash and expenses paid out. Two Methods for Petty Cash.
The first method involves writing ‘checks’ to specific vendors with expense accounts. When disbursing cash from the fund, the petty cash custodian prepares a petty cash voucher, which should be signed by the person receiving the funds.
A petty cash voucher is a document or form that shows the amount of. To endorse a check made out to cash, a person writes his personal account number on the back of the check if it is being deposited directly into his own bank account.
If the check is being cashed, the person may have to visit the bank on which the check was drawn. At the issuing bank, the person can. Write “Petty Cash” on the “Pay to the Order Of” line of the check. Add the amount of the check in the dollar box.
Many businesses maintain $ in a petty cash fund. Jul 29, · Don’t: Leave Petty Cash Off Your Books. Petty cash is a small amount of money, but it adds up quickly as it’s replenished.
To track the cash, create a petty cash account in the asset section of your chart of accounts. When you’re ready to replenish the fund, record the expenses in your accounting software based on the petty cash /5(6).Download