Petty Cash Accounting

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The initial petty cash journal entry is a debit to the petty cash account and a credit to the cash account. To replenish the petty cash funds, a Payment Order is to be prepared. Receipts must be secured for all payments; no reimbursement will be made without an original receipt. Each receipt (properly shown as paid and/or initialed by the person receiving the cash) must be attached to the Payment Order and forwarded to the Business replenishing the petty cash fund requires Office for reimbursement. Retain copies of both the Payment Order and the receipts in a departmental petty cash file. All established petty cash funds or change funds are the property of Bowling Green State University and are subject to handling and accounting policies established by the University. When replenishing or closing a petty cash fund, the custodian must account for the total petty cash fund currently authorized.

replenishing the petty cash fund requires

Petty cash expenditures are subject to all USNH and campus policies, procedures and practices relative to proper expenses, authorization, accounting and documentation. replenishing the petty cash fund requires Note that there generally must be an original sales slip, cash register tape, or other receipt attached to the Petty Cash Voucher for each expenditure.

How Do Companies Record Petty Cash?

An imprest checking account can be used to reduce time, paperwork and administrative expense for minor business expenditures in accordance with all limitations outlined in Procedure 4-001, Petty Cash Funds, Section Certified Public Accountant B1 and B2. Accounting for Petty Cash Transactions – Proper accounting for petty cash requires that Custodians make payments for authorized expenditures only, obtain receipts, and record expenditures.

  • Consider the journal entry below, which is made after the custodian requests $130 to replenish the petty cash fund and submits vouchers that fall into one of three categories.
  • At this time, the person who provides cash to the custodian should examine the vouchers to verify their legitimacy.
  • 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.
  • The remaining cash in the register must be deposited with the campus Cashier/Bursar as representing the current day’s receipts.

The Petty Cash Requisition Form must include original receipts that equal the amount of all disbursements made by the custodian for replenishment or closure. When closing the account, the custodian must personally return any remaining cash to the Bursar’s Office and bring or send a copy of the transmittal to the Controller’s Office. When disbursing money from the fund, the petty cash custodian prepares a voucher which requires the requester’s signature. A petty cash voucher is a form or document that reflects the amount and the reason for petty cash disbursement.

Brown University

Each petty cash expenditure requires a Petty Cash Voucher, Form USNH-F45. See Procedure retained earnings balance sheet 4-005, Preparation of Petty Cash Voucher, for detailed instructions and requirements.

replenishing the petty cash fund requires

The custodian is required to prepare a voucher for each disbursement and attach any source documents for expenses to the voucher, such as invoices and receipts. The custodian must also ensure at all times that the cash available and the petty cash vouchers are equal to the fund’s original total amount. Regardless of the size of your company, as part of your accounting setup, you need to have a petty cash fund to pay for minor expenses and normal balance employee reimbursements. If you have a petty cash account that you can use to manage your company’s transactions, it becomes easier for you to track tax-deductible expenses and separate business expenses from personal expenses. It is important to understand petty cash in order to more accurately and effectively keep track of your company’s finances. An imprest checking account is often used by departments in place of a petty cash fund.