petty cash problems and solutions
Compensation may impact where products are placed on our site, but editorial opinions, scores, and reviews are independent from, and never influenced by, any advertiser or partner. 5 You were able to gather the following from the December 31, 2006 trial balance of Mandaluyong Corporation in connection with your audit of the company: Cash on hand P 500,000 Petty cash fund 10,000 BPI current account 1,000,000 Petty cash is the money a small business keeps on hand to pay for miscellaneous things. To determine which accounts to debit, an employee summarizes the petty cash vouchers according to the reasons for expenditure. Looking for a different set of features or lower price point? Here we detail the three types of pro forma statements. Usually one individual, called the petty cash custodian or cashier, is responsible for the control of the petty cash fund and documenting the disbursements made from the fund. The following entry records this transaction as follows: After the check is cashed, the petty cash custodian normally places the money in a small box that can be locked. In the account type drop-down, select Bank (or Cash or Cash equivalents).. 5. Every dollar makes a difference, and you can save more of them by taking ALL the tax deductions available to your business. I could have sworn I’ve been to your blog before but after looking at a few of the articles I realized it’s new to me. Jane stops to pick up two boxes of donuts, leaving her with $5 in her wallet. Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s). Any transactions made into or out of petty cash need to be recorded on the petty cash log. Our commitment to you is complete honesty: we will never allow advertisers to influence our opinion of products that appear on this site. 8                         23           Paid for ink and nibs      4, 2              Paid for stationary              10                               26           Paid for train fair          5, 3              Paid for cartage                   4                                28           Paid for bus fair            4, 3              Paid for postage stamps     6                                  29           Envelops and letter heads  6, 8              Paid for paper                      1                                 30           Printing address           4, 12           Paid for cartage                   6                                   31           Taxi fare to manager   10. Prepare petty cash book from the following transactions. A content management system (CMS) software allows you to publish content, create a user-friendly web experience, and manage your audience lifecycle. Next Lesson: Bank Reconciliation Statement, (adsbygoogle=window.adsbygoogle||[]).push({}). Download Now. Whatever the cause, the available cash must be brought back to the appropriate level. Please verify that the email is valid and try again. Can you please take this Petty cash is a store of money kept in an office to be used on various employee expenditures, typically small items, and logs need to be maintained. (Sometimes we refer to this fund as an imprest fund since it is replenished when it becomes low.). (4th, Ed.) Here is a video of the petty cash process and then we will review the steps in detail. The journal entry to record full replenishment may require an additional debit (for shortages) or credit (for overages) to Cash Short (Over). Enter the following transactions in the Petty cash book of Sonia Manzoor; Rs. Save my name, email, and website in this browser for the next time I comment. Our comprehensive guides serve as an introduction to basic concepts that you can incorporate into your larger business strategy. Your employees can be relieved of tedious paperwork, burdensome reimbursement procedures and the feeling that their actions may somehow be under suspicion. Date Particulars Rs. All rights reserved. Recording of Transactions – II – Petty Cash Book Solutions. New Delhi: S Chand & Co. Jain, S. .., & Narang, K. N. (2014). If you decide to set up a petty cash fund for your small business, there are a few things you can do to ensure that it runs smoothly, such as creating a petty cash policy that outlines what petty cash can be used for as well as any maximum spending amounts. At the same time, receipts are removed from the petty cash box and formally recorded as expenses. Regardless, I’m definitely delighted I stumbled upon it and I’ll be book-marking it and checking back regularly! The Imprest System is used for petty cash book maintenance. Audit of Receivables. Record the following transactions during the week ending Dec.30, 2014 with a weekly imprest Rs.500, Simple Cash Book Numerical Questions Solutions, Bank Column Cash Book Numerical Questions Solutions, Other Subsidiary Books Numerical Questions Solutions, Recording, Posting and Balancing Numerical Questions Solutions. Postage. When disbursing cash from the fund, the petty cash custodian prepares a petty cash voucher, which should be signed by the person receiving the funds. Notice that the Petty Cash account is not impacted — it was originally established as a base amount, and its balance has not been changed by virtue of this activity. The Cash Over and Short account can be either an expense (short) or a revenue (over), depending on whether it has a debit or credit balance. The petty cash log is one of the most important components of managing petty cash. We’ll provide you with best practices and show you the easy way to set up and use petty cash. At best, it places your employees in an adversarial position —they act in your interest, yet their actions are inherently suspect. amzn_assoc_ad_type ="responsive_search_widget"; amzn_assoc_tracking_id ="eduxircom-21"; amzn_assoc_marketplace ="amazon"; amzn_assoc_region ="IN"; amzn_assoc_placement =""; amzn_assoc_search_type = "search_widget";amzn_assoc_width ="auto"; amzn_assoc_height ="auto"; amzn_assoc_default_search_category =""; amzn_assoc_default_search_key ="class-11-accountancy";amzn_assoc_theme ="light"; amzn_assoc_bg_color ="FFFFFF"; This page contains solutions to Simple cash book numerical questions for the chapter 4 Recording of Transactions – II.

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