Company transfer cash from bank account to petty cash balance. Journal Entry: The company make journal entry by debiting petty cash and crediting cash at bank. In order to gain deep understand, please refer to the Petty Cash Book Example below: Set Up Petty Cashįor example, the company has decided to set the petty cash float of $ 1,000 and this cash is withdrawn from bank account on 01 Jan 202X. Petty Cash Book Example: Accounting Record for Petty Cash transaction This system will only allow the petty cash amount within the float amount. The replenished form should attach with the supporting documents as the top management did not approve of the individual transaction, so he needs to approve the total amount. The cashier can only spend what they have (float amount) and will claim what they already spend. At the month-end, the balance must be replenished back to the float limit. The petty cash start at any fixed balance at the beginning of the month, and it will reduce over time due to expense. Imprest system is the form of a financial accounting system which commonly use to control petty cash. And other small and urgent payments Imprest system on Petty Cash.Not all transactions are suitable with petty cash, the company should strictly allow the settlement with petty cash as follows: What kinds of transactions are suitable with petty cash? However, the amount must be within their level of approval. Accountants need to use petty cash as the suppliers do not allow to purchase on credit. The petty cash helps accountants to process some small and routine payment without authorization from top management. It is usually the cash balance that company use for expenses which require immediate payments. It is recorded in a separated chart account which enables to reconcile daily between accounting record and logbook. Petty Cash book is the book which records small cash payment and receipt during daily business operation.
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