Every time a payment is made through petty cash, it is recorded in the petty cash register usually by the cashier. Name – In this field, you can indicate Petty Cash as the name of the account. We make entries to the Petty Cash account only when the fund is established or when the amount of the fund is changed or when the fund is closed and we want to add back cash in exchange for the petty cash vouchers. The petty cash count is a means of verifying that cash balance exists. The petty cash journal entry is a debit to the petty cash account and a credit to the cash account. Besides maintaining a main or general cash book, many companies also maintain a small cash book known as petty cash book to record small day to day expenditures of the business.. The amount of petty cash will vary by company and may be in the range of $30 to $300. This cheque would then be cashed to acquire the actual cash needed for payments. The bookkeeping entry for this initial fund would be to debit Petty Cash and credit bank account. Accounting for Petty Cash Imprest system. The main advantages of imprest system of petty cash are as follows: A s the petty cashier has to produce to the chief cashier the petty cash book for inspection, it acts as a healthy check on the petty cashier. Since entertainment and supplies are expense accounts, we debit them when the balance increases. The petty cash on hand must be counted periodically, and the cash counted reconciled to the balance on the petty cash account. 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 labor etc. 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 posting from the petty cash book to the respective accounts in the ledger are made directly in total at the end of every month or any other fixed period. Suppose for example a business maintains a petty cash fund of 300. Petty cash replenishment refers to the process of restoring the cash balance in the petty cash fund back to its original imprest amount. The Imprest System of petty cash: The more scientific method of maintaining petty cash so for introduced into practice is theimprest system. 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 labor etc.

A petty cash fund is a small amount of cash kept on hand to pay for minor expenses, such as office supplies or reimbursements.

In all kinds of businesses, employees would have to handle petty cash at one time or another and it would be very useful to record everything in a petty cash log.

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