Dear persons ,
Normally I have RS 1,000
I spent for some expenses RS 500
so how to pass the journal entry and how to close this account journal entry??
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Petty cash entry doubt
Replies (11)
Quick Summary
On 1st on month 1000/- transfer entry from Cash to petty Cash . Create petty Cash ledger.
Contra entry
Petty Cash A/c Dr 1000/-
To Cash. A/c Cr 1000/-
( Transfer to petty Cash)
Expenses. A/c Dr. 500/-
To Petty Cash A/c Cr. 500/-
( expenses paid through petty Cash for the month)
On 31 St end of the month, Balance 500/- transfer to Cash A/c
Cash A/c Dr. 500/-
To Petty Cash. A/c Cr 500/-
( Transfer entry) .
Contra entry
Petty Cash A/c Dr 1000/-
To Cash. A/c Cr 1000/-
( Transfer to petty Cash)
Expenses. A/c Dr. 500/-
To Petty Cash A/c Cr. 500/-
( expenses paid through petty Cash for the month)
On 31 St end of the month, Balance 500/- transfer to Cash A/c
Cash A/c Dr. 500/-
To Petty Cash. A/c Cr 500/-
( Transfer entry) .
If the cash withdrawn for office exp then
Office Expenses A/c Dr
To Cash
Office Expenses A/c Dr
To Cash
Petty cash seperate cash account
If payment is done from Cash in hand account then petty cash seperate entry is not required since petty cash can't be shown in the books
But the query is reading Petty Cash A/c , therefore Expense should be paid through petty Cash only , and normally day today very small expenses are paid through petty Cash only ,
If 1000/- is petty cash balance?
Petty Cash is separate Cash Account, wherein the Cash is transfer from Main Cash , so we have to create Petty Cash ledger under Main Cash account and pay very small Day today expenses through petty Cash A/c , if any balance remain in petty Cash will again transfer to Main Cash or Carried forward to next month , at the end of the year we close petty Cash account and transfer balance to Main Cash account.
we Can not pay Rs 5/- , Rs20 , Rs 70, Rs 130/- or any other small expenses through Cheque , RTGS , NEFT , etc. therefore , same are paid through petty Cash only .
After Paytm or Google pay, I think no need for imprest accounting. It's almost like cash in hand. But it has its advantages cause it can account for even 1/-
If the cash is maintained exclusively by cash section or accounts section then need not maintain seperate petty cash .
If the imprest is for other sections then monthly estimated amount can be transferred to other sections.
If the imprest is for other sections then monthly estimated amount can be transferred to other sections.
Actually, accounting wise couple of methods available. Pragmatic tally approaches is, I have adopted a method where the person who withdraws cash is linked to banks account if they purchase things online instead of putting them under sundry debtors or creditors. Cash is different and they have to name them under sundries because petty cash is not available in many erp
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