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The journal entries for imprest petty cash system are recorded as follows −Fund establishment − (Imprest petty cash fund = 150)AccountDebitCreditPetty cash150Cash150Total150150Payments− (Postage payment = 35, stationery payment = 50)AccountStartEndCash held15065Postage payment35Stationery payment50Total150150Fund replenished − (Postage payment = 35, stationery payment = 50)AccountDebitCreditcash85Postage payment35Stationery payment50Total8585Errors − (Postage payment = 25, stationery payment = 50, error = 10)AccountDebitCreditcash85Postage payment25Stationery payment50Sundry expenses10Total8585Increase in petty cash − (Increased petty cash = 50)AccountDebitCreditPetty cash50Cash50Total5050

In this imprest cash system, the balance of petty cash funds always remains fixed or constant. The amount to be fixed is decided at the start or first time at a fund established. During the period, the petty cashier pays the expenses and maintains vouchers for that.At the end, the cashier submits the vouchers to the chief cashier along with vouchers. After reconciliation, cash spent on expenses is reimbursed and maintains the imprest cash fund to the initial fixed amount. Float is the term used for a granted amount.At any time, cash held plus petty cash vouchers should be equal ... Read More

Refer the data given below to prepare a ledger balance −      Analysis columns CrReceiptFolioDateParticularsVNTotalPostageStationaryTravelling expensesOffice expensesLedger folioLedger account15000CBMar1Cash          Mar3Bus fare11200  1200     Mar5stamps2800800       Mar10Stationary32200 2200      Mar 15Office messenger42800   2800    Mar 17Mr. V53800    PL13800  Mar 18telegrams6900900       Mar23Train fares72100  2100     Mar 24Carbon papers8700 700      Mar 27Office expenses91150   1150  15650 Jan 31Cash 156501700290033003950 3800     15000        Jan 31Balance 30620      SolutionGiven below is the ledger balance as on March 31 2011, by using the columnar petty cash book −General ledger as on 31.03.2011DebitCreditPostage accountPg1Amount31.03.2011Petty cashPCB11700DebitCreditStationery accountPg2Amount31.03.2011Petty cashPCB12900DebitCreditTravelling expensesPg3Amount31.03.2011Petty cashPCB13300DebitCreditOffice expenses accountPg1Amount31.03.2011Petty cashPCB13950

Refer the data given below−Transactions (Year 2015) (*in rupees)Jan 1       Received cash float       25000Jan 3       Paid for bus fare            1500Jan 5       Bought stamps             1000Jan 10    Paid for stationary          2800Jan 15    Paid office messenger   2200Jan 17    Paid to Mr. V                  3200Jan 18    Paid for telegrams         800Jan 23 Paid for train fares           1750SolutionThe solution for columnar petty cash book as per the above mentioned data is as follows −      Analysis columns CrReceiptFolioDateParticularsVNTotalPostageStationaryTravelling expensesOffice expensesLedger folioLedger account25000CBJan1Cash          Jan 3Bus fare11500  1500     Jan 5stamps210001000       Jan 10Stationary32800 2800      Jan 15Office messenger42200   2200    Jan 17Mr. V53200    PL13200  Jan 18telegrams6800800       Jan 23Train fares71750  1750   

Columnar petty cash books consist of both debit and credit sides. In this book, there are many columns which record day to day expenditures.All the particulars (cash receipts and expenses) which are recorded all together in a single column are called a particular column and in other columns date of transactions of debit or credit is recorded.Amount received from the chief/head cashier is recorded in the debit column.Amounts spent are recorded in the credit column in each column.Debit balance = amount of cash receipt – total amount of cash paymentsFormatThe format of columnar petty cash book is as follows −TRCBFDatePVNTPP&TCSTEMELLF                                                                                    Here, ... Read More

We will understand how to enter the transactions in a petty cash book with the help of two examples which are given below.Example 1Transactions for July, petty cashier gets Rs.300/- in advanceJuly 2           Paid for kitchen supplies    Rs. 40/-July 5           Paid for birthday cake        Rs.95/-July 10         Paid for lunch                     Rs.85/-July 25         Paid for taxi fare                 Rs. 35/-July 28     ... Read More

Petty cash books are small cash books which record day to day minor business expenditures. Minor business expenditures include newspaper, fuel, casual labour etc.The person who handles petty cash and their recordings is known as petty cashier. Petty cash books have both debit and credit side and it records all the receipts on the debit side and all payments on the credit side just like a general cash book.Maintaining petty cash booksPetty cash books are maintained using following systemsOpen/ordinary system − Chief cashier gives a lump sum amount to petty cashier for a fixed time and after that fixed period ... Read More

We can prepare accounts receivable and accounts payable ledger postings by using triple column cash book entries. Refer the data given below −454 – Discount allowed ledger number (expense account)480 – Discount received Léger number (revenue account)SolutionThe solution is as follows −Accounts receivable ledgerM&CO            no. 28DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 5thCash311350April 5thDiscount allowed3118H&CO            no. 18DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 24Cash312200April 24Discount allowed3116Accounts payable ledgerS&CO            no. 42DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 3Bank311800April 3Discount Received3115April 19Bank312100April 19Discount Received3112XY Inc            no. 59DateDescriptionPRAmount($)DateDescriptionPRAmount($)April 25Bank31630April 25Discount Received3114

Refer the data given below −TransactionsOn Nov 5th check received is not deposited on same dateNov 1       Cash in hand $950,    cash at bank $4500Nov 3       Paid to J & Co by check $1500    discount received $20Nov 5       Amount received from D & Co $1150    discount allowed $12Nov 7       Deposited cheque from D & CoNov 10    Stationary purchased by cash    $250Nov 15    Merchandise purchased by cash    $1450Nov 15    Cash sales (first half)    $2700Nov 16    Deposited into bank   ... Read More

Refer the data given below −TransactionsAug 1       Bank balance b/d                                        $28000Aug 1       Cash balance                                              $1200Aug 3       Paid cheque for laptop                                $1050Aug 11    Cash withdrawn from bank for office use     $700Aug 13   ... Read More