Petty cash accounting involves establishing a petty cash policy, setting up a petty cash log, creating journal entries, and reconciling the petty cash account. The cashier creates a journal entry to record the petty cash receipts. The petty cash custodian refills the petty cash drawer or box, which should now contain the original amount of cash that was designated for the fund. The entry must show an increase in your petty cash account and a decrease in your cash account. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. Examples of petty cash bookjournal cash book ca cpt cs. The petty cash journal entry is a debit to the petty cash account and a credit to the cash account.
Chapter 3 accounting books and records petty cash book meaning imprest accounting process and principles accounting cycle 8 s in the accounting. For this purpose, a petty cashier is appointed by the chief cashier. There are two primary types of entries in the petty cash book, which are a. We have covered introduction to double entry system, journal, ledger. It is another cash book which is maintained, generally, in large. These are expenses which are incurred day after day. When an analytical petty cash book is maintained for recording the petty expenses, it will be practically more convenient to consider the petty cash as a separate account and take cheques issued for the petty cash imprest as a debit to petty cash account and all petty expenses paid as credits in petty cash account. Recording of transaction in cash book and journal with. Petty cash book is the accounting book that is used for the purpose of. Record that check by posting the total petty cash expense to the proper accounts. If so, you need to record deposits and withdrawals in your books.
We have covered introduction to double entry system, journal, ledger, trial. The journal entry to start a petty cash fund only happens once when the petty cash is first taken out of the cash bank account and put into the petty cash fund. The is only one money column on the debit side and all sum received from time to time by the petty cashier from the chief cashier are entered in it. When your petty cash cashier puts money into the petty cash fund, they must create a journal entry in your books. Like a general cash book, a petty cash book has a debit and a credit side. The general journal entry for this is petty cashier encashes the cheque and keeps this money in a box under lock and key termed as a petty cash box. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal. Cash books a cash book is a combination of a book of original entry ie.
The petty cash account is used to make small purchases. To show this, debit your petty cash account and credit your cash account. How to set up and maintain a petty cash account basic. Examples of petty cash book, learn the basics of accounting process. It is another cash book which is maintained, generally, in large business concerns to reduce the burden of main cash book, in which numerous transactions involving petty small amounts are recorded. Journal is an integral part of bookkeeping which is the starting point of accounting and it records all the business transactions whereas the petty cash book records the transaction related to the cash account. Petty cash book format example definition explanation. Petty cash book is an accounting book used for recording expenses which are small and of little value, for example, stamps, postage and handling, stationery, carriage, daily wages, etc. This video shows the creation and replenishment of petty cash.862 1020 807 1159 1304 605 1422 1352 673 1369 1072 1115 763 448 1343 1040 209 572 546 1328 746 758 1196 224 815 678 725 458 600 304 1496 1048 1460 584 289 968 1015 1156 580 781 1109 1228 609 105 1480 1127 326 1290