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How transactions are entered in a petty cash book?
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 −
| Date | Description | Quantity | Purchase amount | Balance |
|---|---|---|---|---|
| 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 | $12.25 |
Solution
Now, all postage, meals and entertainment and office supplies are debited and the same is credited in a petty cash account.
| Account | Particulars/notes | Debit ($) | Credit ($) |
|---|---|---|---|
| Postage | For business purpose during current period | 5.50 | |
| Meals and entertainment | 40.25 | ||
| Office supplies | 12.25 | ||
| Petty cash | 58.00 |
Updated on: 09-Jul-2021
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