Each payment made is under a particular head and not posted into the ledger separately. The head cashier enters this periodic total with a single entry as Petty Expenses in books of accounts. Upon the completion of the period, the petty cashier submits the report of petty expenses to the head cashier for review. During the month, the cashier summary the report, and the total expense is $ 800 and the remaining balance $ 200.
The date, along with the particulars of the item is recorded in chronological order. For example, the iEduNote company decided to increase the petty cash fund from $500 to 700. For this change, the general new journal entry is the same as above. A petty cash fund is created for a definite amount of money. If any alteration of established petty cash fund is not required, the new journal entry is not needed.
Simple Petty Cash Book
If there is any variance, the responsible person must investigate. If you can remember in the FILE sheet, we
created a list of analytical expenses under column A and name that entire
column as Analysis. This system of Cashbook reduces labor, controls irregular expenses, makes quick payments possible, and also reduces the chance of the main Cashbook becoming overburdened. Organizations need to ensure that they can periodically reconcile these differences to ensure no chance of fraud or any financial malpractice within the company. Dual entry accountancy does not include the PCB and is similar to a supplementary book.
After reconciliation, the head cashier issues the same amount of cash previously fixed. The petty cashier makes payments for sundry expenses like pantry, couriers, promotions, stationery, telephone, etc against a voucher. When a petty cashier needs money, the main cashier gives them a cheque. This cheque is recorded on the payments side of the main Cash Book. Calculate the total amount of expenses made from petty cash.
Table of Contents
The head cashier pays him again $400 for meeting expenditure of February. It depends on the nature, volume and necessity of transactions of a business organization. The reconciliation and review process help organizations safeguard against any leakages because it is often harder to keep track of these expenses. Petty cash books are prepared using the ordinary system and imprest system.
Expense management solutions like Happay offer petty cash management software and prepaid to manage businesses with multiple locations, offices, and outlets. A column for “sundries” is usually added for miscellaneous payments. When a petty expense is recorded on the right-hand side of the book, the same amount is also recorded online custom receipt generator in the proper expense column. Ordinary systemAs part of the normal process of petty cash management, the petty cashier receives an appropriate amount of money. Petty Cash Float is the amount of physical cash with the petty cashier. The float can be decreased or increased based on the expenses during the previous period.
Importance of Maintaining a Petty Cash Book
At this step, on the FILE sheet, select the
whole of column A and name it as Analysis. Then type all your items that will
serve as your Analytical Expenses in Column A. One item for one cell. Rename the
first worksheet as FILE and the second worksheet as ANALYTICAL PETTY
After properly verifying the expenses, the head cashier pays a sum equal to the amount spent by the petty cashier in advance to equalize the petty cashier’s prefixed fund. Imprest petty cash book is a type of cash book that is kept under the specified system. The petty cashier receives a lump sum of cash under the ordinary system. When the whole amount has been spent, the petty cashier submits the details of petty transactions recorded in the petty cash book to the head or chief cashier for analysis. Many businesses keep a separate cash book known as a petty cash book to record small day-to-day business expenses.
Cash Flow Statement Template
Money spent on purchasing assets or payment of debt is recorded in separate columns known as ledger columns. Thereafter total of money columns and the total of all expense columns of the credit side are drawn. A business uses a petty cash account for tracking physical cash used to make small payments.