Replenishing Petty Cash To determine which accounts to debit, an employee summarizes the petty cash vouchers according to the reasons for expenditure. The journal entry to record replenishing the fund would debit the various accounts indicated by the summary and credit Cash.
How do I replenish my petty cash account?
The procedure to replenish and reconcile petty cash begins by counting 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 established value of the Petty Cash fund.
How do you write a journal entry for petty cash?
The initial petty cash journal entry is a debit to the petty cash account and a credit to the cash account. The petty cash custodian then disburses petty cash from the fund in exchange for receipts related to whatever the expenditure may be.
How often do you replenish petty cash?
For this reason, companies typically establish a petty cash fund that needs to be replenished every two to four weeks. Companies assign responsibility for the petty cash fund to a person called the petty cash custodian or petty cashier.
What type of account is petty cash?
current asset
Petty cash is a current asset and should be listed as a debit on the company balance sheet. To initially fund a petty cash account, the accountant should write a check made out to “Petty Cash” for the desired amount of cash to keep on hand and then cash the check at the company’s bank.
Is petty cash an expense or asset?
When does petty cash need to be replenished?
Therefore, at any point in time, the receipts plus the remaining cash should equal the balance of the petty cash fund (i.e., the amount of cash originally placed in the fund and recorded by the entry above). As expenditures occur, cash in the box will be depleted. Eventually the fund will require replenishment back to its original level.
When do you put money into the petty cash fund?
Journal entry for putting money into the petty cash fund. When your petty cash cashier puts money into the petty cash fund, they must create a journal entry in your books. The entry must show an increase in your Petty Cash account and a decrease in your Cash account.
How are petty cash vouchers summarized and debited?
To determine which accounts to debit, an employee summarizes the petty cash vouchers according to the reasons for expenditure. The journal entry to record replenishing the fund would debit the various accounts indicated by the summary and credit Cash. For example, assume the $100 petty cash fund currently has a money balance of $7.40.
What happens when Cash is withdrawn from petty cash account?
Cash is withdrawn from the cash account (to replenish the petty cash fund), and at the same time the expenses are recorded in the correct expense account. Again, it is important to understand that no entry has been made to the petty cash account, this remains fixed at the original imprest amount of 100.
