Presentation on theme: "As the cash book lists bank payments & receipts, a petty cash book is needed to record actual cash transactions."— Presentation transcript:
As the cash book lists bank payments & receipts, a petty cash book is needed to record actual cash transactions.
Voucher is a form which shows what a payment is for.
Imprest systems is a system by which a refund is made of the total paid out in a period.
A worked example of a petty cash book: Step 1 Enter date and details of each payment.Put in the total column. Step 2 For step 1 also put the amount in the column for the type of expense. Step 3 At the end of each period,add up the totals column Step 4 Now add up each of the expense columns. The total of Step 3 should equal the total of all the expense column Step 5 Then balance off the petty cash book,carrying down the petty cash in hand balance to the next period
For example: Write up a petty cash book,with analysis columns for office expenses,motor expenses,cleaning expenses and casual labour.The cash float brought down is $600 and the amount spent is reimbursed on 28 Feb.Show the balance carried down to 1 March. Year 8 $ Feb 1 Letterheadings 32 2 F.Lee-casual labour 15 2 Unique Motors- motor repairs 33 4 Petrol 27 5 Paper clips 10 8 Envelopes 12 9 Cleaning materials C.Hop- casual labour Mr.Ng-cleaner Typewriter ribbons Motor taxation K.Kwan - casual labour 20 Also show how the items for motor expenses and office expenses would appear in the general ledger.
Petty Cash Book
General Ledger Motor Expenses Year 8 $ Feb 28 Petty cash 120 Office expenses Year 8 $ Feb 28 Petty cash 78
Now you know how to prepare a petty cash book ???
Exercise Year 3 May 1 The cashier hands a cheque for$100 to the petty cashier to enable him to obtain cash for the starting float of petty cash $ 3 Stationery Voucher No Postage Voucher No Cleaning expenses Voucher No Payment of amount to K Sutton in the purchases ledger Voucher No Postage Voucher No S-Small- travel exp. Voucher No Stationery Voucher No Cleaning expenses Voucher No Telephone phone bill Voucher No Postage Voucher No The cashier reimburses the petty cashier the amount paid out to date
Postage Year 3 $ May 31 Petty cash 21.3 Stationery Year 3 $ May 31 petty cash 8.8 Travel Exp. Year 3 $ May 31 Petty Cash 4.5 Cleaning Year 3 $ May 31 Petty Cash 27.6 General Ledger
Bank Year 3 $ May 1 Petty Cash 100 Jun 1 Petty Cash 88.6 K Sutton Year 3 $ May 31 Petty Cash 27.4 General Ledger Purchases Ledger
Revision Notes The petty cash book saves 1) the main cash book 2)the ledger accounts from containing a lot of trivial details The use of the petty cash book enables the chief cashier to delegate this type of work to a more junior member of staff Under the imprest system,at the end of a period,the cashier reimburses the petty cashier the amount spent in the that period,so as to make up the cash float.