The following article has been transferred to https://help.synergetic.net.au/s/article/Setting-Up-Petty-Cash
There is often a need to record money that is kept as Petty Cash. This money is kept separately in a petty cash tin and is topped up as required.
Recording the transaction
- Create a GL account (Balance Sheet) for Petty Cash.
- Journal transaction when the cheque is raised for the float is:
- Debit the Petty Cash $100
- Credit Bank $100
Each transaction is then paid from the float. A docket should be used to record each transaction taken from the float.
Reimbursing the Float
- A cheque is raised for the total of all the dockets in the petty cash tin. This is done by creating a creditor called "Petty Cash".
- The journal transaction to record these expenses will be:
- Debit Expense Accounts for each transaction
- Credit Bank
Note1: The petty cash float should always equal $100. This $100 is made up of dockets + any cash remaining.
Note2: The Balance Sheet account created to record the float never changes. It always remains at the float amount ($100). Details of payments made through petty cash are recorded under the creditor "Petty Cash".