ACCOUNTING GRADE 10 PETTY CASH PETTY CASH All

ACCOUNTING GRADE 10 PETTY CASH

PETTY CASH • All payments made have been EFT payments • But what about minor cash payments? ? ? • Eg. Making small donations, items of stationery, purchase of refreshments • An amount for petty cash payments & a petty cashier is appointed to control payments • Petty cashier keeps cash in petty cash box • All payments made are recorded in the Petty Cash Journal (PCJ)

PETTY CASH & CASH FLOAT Ø Petty cash is used for small payments Ø Cash float is money used to give change to customers Ø Petty cash kept in a petty cash box Ø Cash float kept in the till/cash register Ø Both are Assets Ø Increase on the DEBIT side ØDecrease on the CREDIT side.

SOURCE DOCUMENT Ø Payments from petty cash MUST be authorised by senior person Ø If require petty cash you would need to complete a petty cash voucher & have it authorised. Ø No payment should be made without a completed voucher. Ø An example is shown in your books on page 84

IMPREST AMOUNT q The amount of petty cash required for each month is determined in advance. q This is called the IMPREST amount & is given to the petty cashier. q E. G. The imprest amount is R 500, total petty cash payments amounted to R 420 ü R 80 is left in petty cash üHow much is needed to restore the imprest amount to R 500? ü R 420 is needed & given to the cashier ü On 1 st day of each month must have R 500 in petty cash box.

RECORDING q. Withdraw cash from the bank for petty cash o CPJ – reason Petty Cash o Posting to the ledger: DR Petty Cash A + CR Bank A o At the end of the month the imprest amount must be restored again. (same process as above) q Each petty cash PAYMENT is recorded in PCJ ü POST to GL: Dr “Paid for” Cr Petty Cash A-. q Petty cash is an asset – increases on DEBIT side - decreases on CREDIT side q E. G on pg 85 - 87