How transactions are entered in a petty cash book?

Banking & FinanceFinance ManagementGrowth & Empowerment

We will understand how to enter the transactions in a petty cash book with the help of two examples which are given below.

Example 1

Transactions for July, petty cashier gets Rs.300/- in advance

July 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         Paid for paper                    Rs.8/-

Solution

The solution is as follows −

DateDescriptionQuantityPurchase amountBalance
July 1






300
July 2
Kitchen suppliers
1
40
260
July 5
Birthday cake
1
95
165
July 10
Lunch
1
85
80
July 25
Taxi fare
1
35
45
July 28
Paper
1
8
37

Example 2

A company distributes petty cash as follows −

Postage$ 5.50
Pizza (meeting)$40.25
Office supplies$12.25

Solution

Now, all postage, meals and entertainment and office supplies are debited and the same is credited in a petty cash account.

AccountParticulars/notesDebit ($)Credit ($)
Postage
For business purpose during current period
5.50


Meals and entertainment


40.25


Office supplies


12.25


Petty cash




58.00


raja
Published on 09-Jul-2021 12:36:24
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