PETTY CASH

1. PETTY CASH • PETTY CASH IS A SMALL SUM OF ACTUAL MONEY IN THE OFFICE TO MEET DAY TO DAY EXPENSES WITHOUT WRITING A CHECK • GIVEN TO A TRUSTED INDIVIDUAL IN THE OFFICE • IT IS INCLUDED IN CASH WHEN PRESENTED ON THE FINANCIAL STATEMENTS

2. JOURNAL ENTRY TO ESTABLISH PETTY CASH • PETTY CASH $100 • CASH $100 • A CHECK IS WRITTEN OUT OF CASH AND THE CASH TRANSFERRED TO PETTY CASH

3. PETTY CASH • AT ALL TIMES THE CASH IN THE PETTY CASH PLUS RECEIPTS SHOULD EQUAL THE ORIGNAL CASH BALANCE (BUT OFTEN DOES NOT)

4. TO REPLENISH PETTY CASH • WRITE A CHECK FROM CASH TO BRING THE PETTY CASH BOX UP TO ITS ORIGINAL VALUE • DEBIT ALL THE AMOUNTS FOR RECEIPTS IN THE PETTY CASH BOX • DEBIT CASH SHORT AND OVER TO MAKE THE JOURNAL ENTRY BALANCE

5. EXAMPLE TO REPLENISH • THE PETTY CASH BALANCE IS $100 AND IN THE BOX IS $60 OF CASH , A RECEIPT FOR $5 FOR STAMPS AND A RECEIPT FOR $10 WHICH AN EMPLOYEE BORROWED. • STAMP EXPENSE $ 5 • ACCOUNTS RECEIVABLE 10 • CASH SHORT AND OVER 25 • CASH $40

6. TO CHANGE FUND BALANCE • TO CHANGE FROM $100 TO $170 • PETTY CASH $70 • CASH $70