help me out how to prepare petty cash book:'(
Answers
Explanation:
Petty cash is a system that funds and tracks small purchases such as parking meter fees that aren't suitable for check or credit card payments. A petty cash book is a ledger kept with the petty cash fund to record amounts that are added to or subtracted from its balance. Petty cash should be part of an overall business accounting system that documents how your business moves funds between one account and another and how it spends its money.
Purchase Information
Your petty cash book allows you to record relevant information about the purchases you have made. Dedicate a field for item descriptions and use this field to enter as much information as necessary. For example, if you bought a screw at the corner hardware store, you might note whether this purchase was used to fix a piece of infrastructure equipment or as a part of a product you will sell directly to a customer. Also include fields for the date and the amount of the purchase.
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.
Reconciliation
The amounts you record in your petty cash log and the balance you calculate each time you add or remove funds should match the amount that remains in the box after you make the transaction. Your petty cash book protocols should include a system for verifying that funds have been added and subtracted accurately and honestly. For example, plan to count the funds and reconcile them with the amounts in your petty cash book every time you add cash.
Integration
The information in your petty cash book is part of a larger accounting system that explains your company's financial activity for tax purposes and also distills feedback about efficiency and profitability. Periodically integrate the information in your petty cash book with the records in your general accounting system by listing purchase amounts in the appropriate categories and using these figures to offset profits. Also keep records of how you obtained the funds that you used to start and replenish your petty cash nfunds, such as making a cash withdrawal from the bank....
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Petty cash is a system that funds and tracks small purchases such as parking meter fees that aren't suitable for check or credit card payments. A petty cash book is a ledger kept with the petty cash fund to record amounts that are added to or subtracted from its balance. Petty cash should be part of an overall business accounting system that documents how your business moves funds between one account and another and how it spends its money.
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