Tuesday, May 22, 2012
Petty Cash Accounting
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Petty cash expenditure is a relatively small number that are not possible using a check
Soemarso (2004) defines a petty cash fund as follows:
"A certain amount of cash set aside in the company and used to serve certain expenses. Expenditure-expenditure is usually made through a petty cash fund expenditures which are not large in number, other expenses made by the bank (by check) ".
Usually the expenses are included in the petty cash fund its expenditures. As for expenditures made with petty cash funds are the costs:
- The cost of eating and drinking
- Cost of equipment
- The cost of office supplies
- As well as other costs.
In managing the petty cash fund That there are two methods can be used the Imprest Fund Fluctuation Method and Method.
a. Imprest Fund Method
Imprest Fund at the system, Baridwan (1992) defines: "In this system the amount of petty cash funds in the account always Remains, in the amount of the check is handed over to the cashier to petty cash to Establish a petty cash fund"
b.luctuation Method
According Baridwan (1992) Fluctuation Method says "In a system of petty cash account balance fluctuations fixed, but fluctuates According to the amount of back filling and expenditure-expenditure of petty cash".
Example of Petty Cash Accounting
A company sets up a petty cash fund and initially funds it
with $300. The entry is:
Account
|
Debit
|
Credit
|
Petty cash
|
$300
|
|
Cash
|
$300
|
The petty cash custodian lets the cash balance in the petty cash box decline to $20 before applying for replenishment. The cashier issues a replenishment check for $280, The entry is:
Account
|
Debit
|
Credit
|
Petty cash
|
$280
|
|
Cash
|
$280
|
The cashier records the expenses associated with the petty cash receipts that were submitted. The entry is:
Account
|
Debit
|
Credit
|
Office expenses
|
$280
|
|
Petty
cash
|
$280
|
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