200 - Petty Cash

Current Assets

Cash & Contracts

Synopsis

Account 200

Remarks:

The petty cash fund is used for small purchases which cannot conveniently be paid by check, and for use as a change fund.

The amount of the petty cash fund should be held to minimum requirements.  Large sums, including payroll and payroll advances, should not be paid out of the petty cash fund.  Cash received in the regular course of business should not be commingled with petty cash.

Each disbursement from the fund should be recorded and explained on a petty cash voucher.  Petty cash vouchers should be pre-numbered and issued in numerical sequence.  All vouchers must be accounted for, and none destroyed.  If for any reason a voucher is unusable, it should be marked “Void” and filed in proper numerical order with the other vouchers.

Vouchers should be prepared in ink and approved by the proper personnel.  The voucher serves as a receipt from the person receiving the money.  Paid invoices should be attached to related vouchers supporting the disbursement of funds.  Each voucher should be summarized on a petty cash summary.  As often as necessary, and always at month end, a check should be issued reimbursing the fund and each voucher  should be charged to the proper account.

The sum of all petty cash vouchers on hand, plus actual cash, should always equal the amount of the petty cash fund.  Checks issued to reimburse the fund should be made payable to the custodian of the fund (for example, “J. B. Doe – Petty Cash”).

Note: