Petty Cash book double entry vs Petty Cash book excluding double entry Flashcards
Why is there no need for an entry to the petty cash control account in a double entry system?
The petty cash book acts as the general ledger account.
What are the double entries required for the general ledger in the petty cash book?
Dr Analysed Expenses (for example Postage, Staff Welfare, Travel), Dr VAT control, Cr Bank.
Why is it Dr Analysed Expenses, Dr VAT, Cr Bank?
Analysed Expenses is an Expense (DEAD), Bank is an asset but there is a decrease (DEAD).
What should the account names in the general ledger always match?
The account names should always match the analysis column headings in the petty cash book, not the description of the expense given in the ‘Details’ column. If we use Postage as an example, we would write ‘Postage’ which is written in the column headings, therefore we cannot write ‘Post’ because this detail is the description of the expense occurred.
What must the postings be in the general ledger for a petty cash book, if it is not part of the double entry system?
Dr Petty cash control (amount put into petty cash), Dr Analysed Expenses, Dr VAT control, Cr Bank, Cr Petty cash control (amount spent on expenses).
Why is it Dr Petty Cash, Dr Analysed Expenses, Dr VAT, Cr Bank, Cr Petty Cash?
Petty cash (Dr) is an asset (DEAD), Analysed Expenses is an Expense (DEAD), Bank is an asset but there is a decrease (DEAD), Petty Cash (Cr) is an asset but there is a decrease (DEAD).
Why could the amount that adds up all the vouchers and money left over in the petty cash box not reconcile with the amount put into petty cash at the start of the day/week/month?
There could be a missing voucher, missing or stolen petty cash, or an incorrect amount written on one or more vouchers.
What should you do if there was petty cash/vouchers missing from the petty cash box?
Report it to your supervisor/manager.
