Add a petty cash account to your chart of accounts: Start a petty cash fund by writing a check drawn on your company to "Petty Cash. The following vouchers were issued during May: Date… Remember this is petty cash so by definition the float amount is usually $100 or less. Demonstration of Typical Petty Cash Journal Entries. Print References View transaction at Journal entry worksheet 3 < ។ 2 5 Prepared a company check for $400 to establish the petty cash fund Edebite brends total of $550. Disbursements: Individual disbursements from petty cash are not recorded via a journal entry. The journal entry is to debit petty cash and credit cash at bank. (1) To setup your petty cash fund, write a cheque and code it: Debit (Increase) Petty Cash (current asset account on the balance sheet) Credit (Decrease) Cash in Bank (current asset account on the balance sheet). At the time the fund is established, the following journal entry is needed. This initial setup amount is sometimes referred to as your float. Petty cash accounts are managed through a series of journal entries. The journal entry to replenish the petty cash fund includes: The present value of $50,000 using a 10% interest rate Drebin Security Systems sold merchandise to a customer in exchange for a $50,000, five-year, noninterest-bearing note when an equivalent loan would carry 10% interest. (This is the amount of the company check that will be cashed to get the cash in the petty cash fund back to the imprest general ledger amount of $100.) Replenishing the Petty Cash Fund, will increase the expenses incurred, and credit the chequing account. Using the above information, the journal entry to replenish the petty cash fund will include a credit of $94.00 to the account Cash: Checking Account. A petty cash custodian should be designated to have responsibility for safeguarding and making payments from this fund. If a petty cash fund was established with a 250 balance and currently has cash of 31 and petty cash tickets totaling 219 what would be included in the entry to replenish the fund? Solution for PETTY CASH RECORD AND JOURNAL ENTRIES On May 1, a petty cash fund was established for $150. This journal entry, in essence, subdivides the petty cash portion of available funds into a separate account. "Cash the check. Note that there is no effect on the Petty Cash Fund … 5 Required: Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase In the fund balance on May 16 and May 31. It is a) true that an entry to replenish a petty cash fund would include a debit to Petty Cash. Instead journal entry is passed at the time of each replenishment and at the end of the period for the total amount disbursed. The custodian of the petty cash fund will monitor the fund balance on a regular basis. The imprest petty cash system is a method of accounting for petty cash expenses. Entries are needed to (1) establish the fund, (2) increase or decrease the balance of the fund (replenish the fund as cash is used), and (3) adjust for overages and shortages of cash. Consider the journal entry below, which is made after the custodian requests $130 to replenish the petty cash fund and submits vouchers that fall into one of three categories.
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