Petty Cash Funds 2025

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All Petty Cash Funds must be stored in a secured device such as a safe or cash box in a locked cabinet. Only the Petty Cash Fund custodian should have keys to the box and cabinet. Funds should never be left unattended and unsecured. Funds within a box need to be locked and behind locked doors when not attended.
The nominal amount stored in the form of cash which an organisation deems petty will vary across companies. However, most organisations maintain a petty cash reserve in the range of Rs 5,000 to Rs 20,000.
ing to the law, you cannot make payments in excess of ₹ 10,000 in cash in a day. Such expenses cannot be deducted from your business income.
Petty-cash funds are to be maintained on an imprest basis. The custodian/s should balance the fund each day to ensure that the available cash and the approved petty cash vouchers tally. Petty cash disbursements are limited to $50.00 or less per individual, per month.
When a petty cash fund is in use, the custodian records the petty cash transactions on financial statements . No accounting journal entries are recorded when purchases are made using petty cash. Journal entries are only recorded when the custodian needs more cash.
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The GAAP rules recommend that petty cash funds are kept in a locked location, such as a cash box or drawer, with documentation of transactions. Businesses should designate a custodian of the petty cash fund and designate a different person to authorize or approve disbursement of the funds.

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