When you first create your petty cash fund, you record a debit to your petty cash account and a credit to your bank account in your general ledger. For example, if you take $200 out of the bank to fund your petty cash, you record the withdrawal from your bank account and note that the funds were for your petty cash.
Is a petty cash fund an asset or liability?
Petty cash funds may be used for appropriate departmental expenditures of $100 or less. They may not be used for salaries, current accounts to be paid monthly nor advance payments. No loans or advances to employees may be made from the fund. No checks may be cashed from this fund.
Is the petty cash fund an asset or liability?
Yes, petty cash is considered a current asset on a companys balance sheet. It represents a readily available source of funds for minor expenses.
3.0 Agency Records and Use of Petty Cash Petty cash funds are used to pay for small expenditure items in which payment cannot be issued out of Core-CT or
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