'Petty Cash Fund\r'

'Petty change investment trust is a relatively humiliated summation of bills that businesses handle on hand for the take of small proceedings such as providing change to customers, postage expenses, passage tolls etc. In such transactions, the use of represents is sentence consuming, costly or illogical. Usually a flight att closureant is ap argueed to administer the lowly capital and it is his/her art to account for the expenses incurred bulge of fiddling capital line. Whenever the steward makes any payment from the fund to an employee or a customer etc. he or she essential record the heart being disbursed, the name of the mortal to whom the payment is being do and the reason for the disbursement. interest are the typical transactions connected to piddling(a) notes fund. 1. Creation: Petty currency fund may be created by drawing a check on the companys checking account and handing it over to the shop steward of the fund. The daybook entry is to debit e ntry petty currency and credit hard capital at bank. 2. Disbursements: Individual disbursements from petty change are not recorded via a journal entry.\r\nInstead journal entry is passed at the judgment of conviction of each fillment and at the end of the period for the total measuring rod disbursed. 3. Replenishment: When the repose in petty cash becomes low, a journal entry is passed debiting various expense accounts and crediting petty cash for the sum of disbursements made. Then petty cash is replenished commonly via a check. 4. Raising Fund Level: When the majority of transactions to be handled by the petty cash grows, the fund level is raised. The journal entry is to debit the petty cash and credit cash at bank.\r\nSteps Familiarize yourself with the purpose of the petty cash fund. The fund should be used for very small expenses, like buying stamps or envelopes, paying a small delivery fee, or paying a cab fare. It should not be used for giant procures; these shoul d be paid for by check in order to leave a record. Decide on the amount of the petty cash fund. The fund should largely not hold more than a a couple of(prenominal) hundred dollars; 100 dollars is a common amount for many small businesses. Keeping too ofttimes cash in the fund makes it a point for theft and misuse.\r\nAssign responsibility for the petty cash fund to someone. This someone is called the petty cash bring througher. salvage a check to the petty cash steward to establish the fund. The steward should cash the check and pass the cash in a locked cash box. cut down money from the petty cash fund. To do this, employees should entreat the necessary cash from the custodian. The custodian will wherefore fill out a voucher for the amount disbursed and place it with the rest cash. Place the know from the purchase into the cash box.\r\nThe receipt should be attached to its synonymic voucher. No journal entries need to be made for cash spent out of the petty cash f und ? this is the entire point of maintaining the fund. Replenish the petty cash fund when it gets low. The custodian will relieve oneself the vouchers to whomever writes the checks to fill the fund. The vouchers should be examined for legitimacy, and then a check should be written to the custodian for the total amount of the vouchers. When this check is cashed, the cash is placed in the locked cash box.\r\nContinue to spend money from the petty cash fund, replenishing the fund when necessary. Debit- withdrawal, deductionpetty- small-scale/smalldisbursed-payout, spend,expend Petty cash fund is a relatively small amount of cash that businesses keep on hand for the purpose of small transactions such as providing change to customers, postage expenses, pass tolls etc. In such transactions, the use of checks is time consuming, costly or illogical. Usually a custodian is appointed to administer the petty cash and it is his/her handicraft to account for the expenses incurred out of pett y cash fund.\r\nWhenever the custodian makes any payment from the fund to an employee or a customer etc. , he or she moldiness record the amount being disbursed, the name of the person to whom the payment is being made and the reason for the disbursement. another(prenominal) internal control is to keep as little cash on hand as possible. It is practically necessary, however, to keep some cash on hand. hard cash kept on hand at a business to pay for small items such as postage due, a birthday card, or terminate expenses is known as Petty notes.\r\nPetty money is generally kept in a petty cash drawer and payments are made for many-sided items out of this cash. Petty funds is paid out in exchange for a petty cash voucher signed by both the recipient role of the cash and the petty cash controller. The voucher should imply the amount of cash paid out and the purpose of the disbursement. The recipient of the cash should provide a receipt for the purchase made out of petty cash wh ich will be attached to the petty cash voucher.\r\nReplenishing Petty Cash At some point the Petty Cash fund must be replenished. It is at this point that the petty cash fund will also be reconciled. The procedure to replenish and reconcile petty cash begins by ascertain the cash remaining in the Petty Cash drawer. Next, all vouchers are totaled. The combined total of remaining cash and Petty Cash Vouchers should equal the ceremonious value of the Petty Cash fund. Finally, the Petty Cash vouchers should be organized into expense categories.\r\n'