AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
Journal entry to Reimburse travel3/28/2024 Please prepare the journal entry for petty cash reimbursement.įirst, ABC needs to record expenses and staff advances which are paid by petty cash. They withdraw cash at bank to petty cash. During the month, the company has used the money to pay for taxi $ 100, other expenses $ 500, and staff advance $ 2,000 for urgent travel.Īt the end of the month, company refills the petty cash to its float balance, $ 5,000. On 01 January 202X, the company has set up a petty cash balance of $ 5,000. In order to support the business activity, management decides to set up petty cash of $ 5,000 to support the small and urgent payment. Petty Cash Reimbursement Journal Entry ExampleĪBC is a consulting firm that provides services to other companies. They may use other cash account based on company policy. This entry makes to record the transfer of cash at bank to petty cash. Account Debit Credit Petty Cash 000 Cash at Bank 000 The company needs to make journal entry by debiting petty cash and credit cash at bank. Accountants need to reimburse the petty cash to float the balance. Account Debit Credit Staff Advance/Other assets 000 Petty Cash 000Īfter the recording of petty cash usage, the petty cash balance will decrease. The accountant can make journal entry by debiting assets or staff advances and credit petty cash. The petty cash may be use to purchase small assets and staff advances, so the entry will not impact the expense but other assets. To simplify the recording, an accountant may summary the transactions to record the journal entry. It depends on the nature of transactions. The company can use expense subaccounts such as taxi expenses, office supplies, and other miscellaneous expenses. Account Debit Credit Expense 000 Petty Cash 000 The company makes journal entry by debiting expenses and crediting petty cash. So we have to separate the process of petty cash reimbursement into two journal entries. The reimbursement process will refill the petty cash to the floating balance and recognize expenses based on the classification. If both reports are correct, the remaining cash will be the same as actual cash.Īfter reconciliation, accountant will reimburse the petty cash to its original balance which is known as the floating balance. The beginning balance is based on the prior period report while the total cash out is based on the cash-out report that attaches with supporting documents during the month. The remaining cash should equal the actual cash count in the petty cash box. Remaining cash = Beginning Cash Balance – Total Cash Out During the month They will reconcile the petty cash balance by comparing the remaining cash on paper with the actual cash count. All expenses paid by petty cash must attach with supporting documents such as invoices.Īt the month-end, the accountant will summary all expenses and attach all supporting documents. The responsible person will keep a record of cash movement during the month. Any small expenses which meet the criteria will be paid using petty cash. In the begging, the company will withdraw money from bank account and keep it with a responsible person. It should not be too low as it will not enough for the business operation and it can delay the work process. It should not be too high as we will lose the opportunity in using cash and even face fraud. The company will set the floating cash which suitable for each business. During the day, company needs to pay for some small expenses which are not practical to ask for credit from a supplier.Ĭompany usually keep some small cash balance to pay for minor expenses such as taxi, office supplies, cards, and so on. Petty cash is the cash that company holds for small payments settled in the office or operation.
0 Comments
Read More
Leave a Reply. |