1 Petty cash

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3 Not this!

Petty cash Efficiency. Reduce the number of postings by adding transactions together. Although the transactions are individually insignificant they do need to be accounted for, as in total they may be significant. Reduce the workload of the cashier by delegating to another person: the petty cashier. Why? It is easier to control if similar transactions are dealt with together.

5 Petty cash Delegate small payments to another person: the petty cashier How? Usually by operating an imprest system = topping up a float to the original amount. Vouchers in petty cash tin + cash = predetermined float At all times

6 Regularly count the petty cash and vouchers to check total = float Vouchers in petty cash tin + cash = predetermined float Voucher in Cash out = Day-to-day petty cash expenditure

7 Regularly count the petty cash and vouchers to check total = float Vouchers in petty cash tin + cash = predetermined float Vouchers out Cash in = Petty cash re- imbursement from bank or cash account

8 Payments made out of petty cash are either: To employees to reimburse them for money they have spent out of their own pocket Or Directly to suppliers for various small purchases or to pay for services

9 Can you give examples of expenditure that may be reimbursed to employees? Can you give examples of payments made for small purchases or services? In your groups see how many examples you can think of

10 Petty cash Count – when? Float = how large? Restoring the float – how often? Analysis columns – what to set up? Security – must be kept in a locked cupboard

11 Petty cash Receipts matched to vouchers Practise balancing the petty cash book and showing the amount necessary to restore the imprest. Vouchers signed by person receiving the cash Float = Imprest For exams

12 Example Petty Cash Voucher

13 Accounting for petty cash Dr. Petty cash account Cr. Cash or bank account With the initial float

14 Analysis columns – what to set up?

15 Restoring the float

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