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petty cash ledger

Columns for the date, voucher number, and particulars are common for both receipts and payments. The benefit of an analytical petty cash log is that it explains each transaction, giving you more depth than the simple petty cash book. And because each payment is categorised, you can get an idea not just of spend, but of spend distribution. Under the imprest petty cash system as the totals of different heads of expenditures are posted in ledger accounts after a certain period, the workload of a cashier is minimized to a great extent. Petty expenses are recorded in petty cash book in chronological order of dates instead of the cash book.

The employee, who keeps the petty cash book, is called petty cashier. The petty cash is controlled through the use of a petty cash voucher for each payment made. The expenses will be recorded in the company’s general ledger expense accounts when the petty cash on hand is replenished. If there’s a shortage or overage, a journal line entry is recorded to an over/short account. If the petty cash fund is over, a credit is entered to represent a gain.

Example for the Simple Type Book

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How do you categorize petty cash?

When you give cash to an employee or use petty cash yourself, record it with a slip of paper to track who, when, and what the money was used for. This is like a receipt to track the cash that you take out. In QuickBooks, record taking cash from petty cash as an expense with petty cash as the payment account.

Analytical petty cash bookAn analytical petty cash book is one which there is one amount column on its debit side and a number of amount columns on its credit side for different heads of expenses. Since the petty cash book analyses, the expenses into a number of heads of expenses, the name given to it is analytical petty cash book. Each payment is recorded on it twice; business accounting: small business accounting one on total amount column and next on individual expense column. The difference between the total receipts and total payments is the balance with the petty cashier. The balance is carried to a subsequent period and therefore the petty cashier is paid the quantity actually spent. A petty cash book is a way of tracking the comings and goings of your petty cash.

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This is a petty cash system where by a float (original sum given by the main cashier) is maintained at the end of a specific period of time. Imprest system involves setting of a specific amount of cash to be used by the petty cashier within a specific period of time. After the petty cashier spends the cash given, the report is presented to the main cashier who reimburses the petty cashier to ensure that he/she restores the original cash issued earlier as agreed (a float). Therefore, in the beginning of every period, the balance b/d in the petty cash book under imprest system is the same.

Petty Cash Book Definition

In the financial world, it also refers to a company’s highly liquid assets—funds in checking or other bank accounts, money market funds, short-term debt instruments, or other cash equivalents. Though not literally cash, it’s money that can be easily and quickly accessed, which is why it’s “on hand.” The petty cashier submitted the below expenses with their respective amounts for the current period amounting to 900. The petty cash book is defined as relatively small amount of cash kept at hand for making quick payments for miscellaneous small expenses in the business

concern. A somewhat more useful format is to record all debits and credits in a single column, with a running cash balance in the column furthest to the right, as shown in the following example.

petty cash ledger

Cash on hand is any accessible cash the business or liquid funds have. It can be in the form of actual money, like amounts you haven’t yet deposited in the bank or smaller bills and coins that you keep in the cash register to make change for customers. These are expenses which are incurred day after day; usually, petty expenses are large in quantity but insignificant in value. To record such expenses, a different book known as a petty cash book is maintained. The cash allocated for petty expenditures for a specific period is entered on the credit side of general cash book and on the debit side of petty cash book.

Is petty cash book a journal or ledger?

Part of the manual record-keeping system of a firm, in most companies, a petty cash book is a ledger book instead of a computer record. This is different from bookkeeping which is the process of recording your company's financial transactions into organized accounts.

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