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WP:concise (don't elucidate ALL: "percentage vs lump sum" etc countless methods)
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{{short description|Funds in the form of cash}} |
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{{Bookkeeping}} |
{{Bookkeeping}} |
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'''Petty cash'' |
'''Petty cash''' is a small amount of discretionary funds in the form of [[cash]] used for minor expenditures.<ref name="Hosein1988">{{cite book|author=P. Hosein|title=Principles of Accounts (Cxc)|url=https://books.google.com/books?id=nNo7874TM2MC&pg=PA93|date=29 July 1988|publisher=Heinemann|isbn=978-0-435-98309-3|pages=92}}</ref> |
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The most common way of accounting for petty cash expenditures is to use the [[imprest system]].<ref name="Trenerry1999">{{cite book|author=Alan Trenerry|title=Principles of Internal Control|url=https://books.google.com/books?id=MAovFkmaGMAC&pg=PA125|year=1999|publisher=UNSW Press|isbn=978-0-86840-401-1|pages=125–}}</ref> |
The most common way of accounting for petty cash expenditures is to use the [[imprest system]].<ref name="Trenerry1999">{{cite book|author=Alan Trenerry|title=Principles of Internal Control|url=https://books.google.com/books?id=MAovFkmaGMAC&pg=PA125|year=1999|publisher=UNSW Press|isbn=978-0-86840-401-1|pages=125–}}</ref> |
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As expenditures are made, the custodian of the fund will reimburse employees and receive a petty cash [[voucher]] with a receipt/invoice attached in return. At any given time, the total of cash on hand plus reimbursed vouchers must equal the original fund. |
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When the fund gets low, e.g. $20 remaining, the custodian (a [[bookkeeper]] or a member of the administration staff) requests a top up and submits the vouchers for reimbursement. Assuming the vouchers add up to $80, an $80 top up cheque is issued and an $80 debit towards office expenses is recorded. Once the cheque is cashed, the custodian again has cash at the original amount of $100. |
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==Audit controls== |
==Audit controls== |
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Oversight of petty cash is important because of the potential for abuse. Examples of petty cash controls include a limit |
Oversight of petty cash is important because of the potential for abuse. Examples of petty cash controls include a limit on disbursements and monthly [[audit]]s by someone other than the custodian.<ref name="Jackson2006">{{cite book|author=Peggy M. Jackson|title=Sarbanes-Oxley for Small Businesses: Leveraging Compliance for Maximum Advantage|url=https://books.google.com/books?id=seipglcbBxYC&pg=PA101|date=28 November 2006|publisher=John Wiley & Sons|isbn=978-0-470-05004-0|pages=101–}}</ref> Use of petty cash is sufficiently widespread that vouchers for use in reimbursement are available at any office supply store. |
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The petty cash daybook is one of the [[Bookkeeping#Daybooks|daybooks]] used in bookkeeping and the [[double-entry bookkeeping system]].<ref name="CanwellSutherland2005">{{cite book|author1=Diane Canwell|author2=Jon Sutherland|title=BTEC First Business|url=https://books.google.com/books?id=Re8tYpaCpmgC&pg=PA105|year=2005|publisher=Nelson Thornes|isbn=978-0-7487-9431-7|pages=105–}}</ref> |
The petty cash daybook is one of the [[Bookkeeping#Daybooks|daybooks]] used in bookkeeping and the [[double-entry bookkeeping system]].<ref name="CanwellSutherland2005">{{cite book|author1=Diane Canwell|author2=Jon Sutherland|title=BTEC First Business|url=https://books.google.com/books?id=Re8tYpaCpmgC&pg=PA105|year=2005|publisher=Nelson Thornes|isbn=978-0-7487-9431-7|pages=105–}}</ref> |
Bookkeeping |
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Key concepts |
Financial statements |
Related professions |
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Petty cash is a small amount of discretionary funds in the form of cash used for minor expenditures.[1]
The most common way of accounting for petty cash expenditures is to use the imprest system.[2]
Oversight of petty cash is important because of the potential for abuse. Examples of petty cash controls include a limit on disbursements and monthly audits by someone other than the custodian.[3] Use of petty cash is sufficiently widespread that vouchers for use in reimbursement are available at any office supply store.
The petty cash daybook is one of the daybooks used in bookkeeping and the double-entry bookkeeping system.[4]