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Petty cash introduction
This document discusses petty cash, including: - Petty cash refers to small, regular business expenses like stationery, cleaning supplies, and refreshments that are paid in cash. - Petty cash payments are recorded in a petty cash book to track spending. - A petty cash voucher is used to document each expense and must be attached to receipts. - The imprest system provides an initial fixed amount (the "float") in the petty cash fund, which is replenished after expenses are deducted to restore the original amount.
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Petty cash introduction
- 1. CAS H Printer Ink Stationery Taxi fare Refreshments Cleaning supplies PETTY Lookat these pictures and suggest how much these items cost
- 2. What is Petty Cash? •Basedon the role play, what is petty cash? •Petty cash refers to small items of expenditure which may occur from time to time•All businesses have different items for petty cash. Some of the common ones are stationery, stamps, cleaning supplies, taxi fares, parking fees and refreshments •The book that is used to record these payments is called the PETTY CASH
- 3. Purpose of Petty Cash •Itis not practical to pay small amounts by cheques •It reduces the number of entries for small payments in the Cash Book •The job of recording small payments can be assigned to a junior clerk •It is convenient to keep small amounts of cash in the office which are easy to access when the need arises
- 4. Source Documents •Before pettycash is issued, a person has to authorise (give permission) for the money •A PETTY CASH VOUCHER is written out •This is a small form that shows information in as much detail as the firm decided•It provides evidence of payments from the Petty Cash fund •Once a bill is given to the Petty Cashier they should attach the bill to the voucher
- 5. Features of aPetty Cash Voucher No:____ Voucher Number Name of person What the money is being spent on Amount in figures
- 6. Features of aPetty Cash Voucher Amount of money in words Person authorising payment Date of transaction Person receiving No:____
- 7. Activity Time •Prepare thePetty Cash Voucher Angela went to purchase liquid soap for the business washroom she spent $15.50.
- 8.
- 9. Imprest System •The imprestsystem is a system for controlling petty cash •The imprest is the amount that the petty cashier is given by the regular cashier to keep in the petty cash box •Another name is a float •At the end of the period, (usually a week or a month), the imprest is restored •How is this done?
- 10. Let’s try this: Richiemaintains the petty cash for MasterMind Store. The imprest she is given on 1 August is $100. During the month the following expenses came out of petty cash and for each item a petty cash voucher is drawn up:
- 11. •3 August Ashakineeds money for taxi fare to deliver some documents to San Fernando $25 •4 August The office clerk, Carla had to purchase liquid paper $5 •3 August The office needs coffee, $10 was given to Karishma to purchase the coffee at Massy Supermarket
- 12. •5 August Carloshas to purchase stamps ($10) and buy envelopes ($10) to mail some letters •6 August Need a Guardian and an Express newspaper, Stevanne will go for it, he needs $4 •7 August Kizzy bought pens and pencils for $10.50
- 13. How much wasthe imprest? $100 How much was spent for the week? $74.5 0How much is remaining in the petty cash?$25.50
- 14. Can anyone sayhow the imprest is restored?Answer: The petty cashier calculates the total expenses. The total expenses will be reimbursed by the main cashier. This enables the petty cashier to have the original amount to start the new period How much is needed to restore the imprest ? $74.5 0
- 15. Next presentation wewill look at recording the information in the petty cash book
- 16. Let’s see ifthe business we looked at earlier found a solution to their situation. The conclusion of the role play