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What is the journal entry of petty cash?

A petty cash journal entry is a financial record documenting the transactions made from the petty cash fund. These entries ensure that all withdrawals and replenishments are accurately tracked, providing an audit trail for small business expenses.

Is petty cash a debit or credit account?

How to record petty cash? Step 1: Create petty cash policies and procedures. Step 2: Store the petty cash in a box. Step 3: Reimburse and record it in petty cash logs. Step 4: Reconcile regularly. Step 5: Log petty cash. Step 6: Reload the cash. Consider the Spend. Recording Petty Cash Transactions.

How to keep track of petty cash?

How to Keep Track of Petty Cash Step #1 - Purchase a Lock Box. Step #2 - Assign Responsibility. Step #3 - Store the Petty Cash Box and Set a Limit. Step #3 - Deposit Cash into the Petty Fund. Step #5 - Create a Transaction Log. Step #6 - Track the Petty Cash Fund on the Accounting Records of Your Business.

How to record the petty cash?

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.

What are the gaap rules for petty cash?

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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