Explain the method of balancing the petty cash book
Answers
Explanation:
. Identify the ending balance of the account as of the last reconciliation. This is the starting balance for the current period. In most cases, this is a standard balance, such as a $200 petty cash fund.
2. Count the total funds left in the petty cash account at the end of the period. For example, count the balance at the end of the month if you do a monthly reconciliation. Record the current balance.
3. Gather all of the receipts provided for expenses that were paid out of the account for the period in question. Add the total amount of the receipts and record it as the total expenses.
BALANCE INFORMATION:-
A petty cash book should provide a clear, simple system for tracking how much money is currently in the fund. Include fields for calculating a running balance and for recalculating this balance every time you withdraw or add to the fund. These fields should provide a framework for simple equations, enabling you to subtract purchase amounts from the balance and add the amounts of additional cash infusions that you make to replenish the fund.