The petty cashier gets cash against the cheque from the bank and records the cheque in the receipts column of the petty cash book. Petty cash administrative services division office of. Refer to the university financial policy manual for details. The petty cash custodian refills the petty cash drawer or box, which should now contain the original amount of cash that was designated for the fund. Pdf accounting for petty cash and cash short and over. Petty cash, also known as imprest cash, is a fund established for making small payments that are impractical to pay by check. Petty cash division of finance the university of vermont.
Examples include postage due, reimbursement to employees for small purchases of office supplies, and numerous similar items. Petty cash a petty cash fund is cash loaned for the purpose of making small purchases where it is not reasonable to make a disbursement by check and purchases are impractical or unavailable through. Petty cash or a petty cash fund is a small amount of money available for paying small expenses without writing a check. Petty cash procedure guide california state university.
Petty cash accounts are managed through a series of journal entries. A petty cash fund is a small amount of cash kept on hand to pay for minor expenses, such as office supplies or reimbursements. The petty cash system was not designed to bypass the accounts payable or purchasing systems. Uses of the petty cash fund checking accounts and calcard accounts the petty cash fund may.
The district shall maintain a petty cash fund of one thousand dollars. Petty cash funds shall not be advance in anticipation of an approved purchase. Thus, using a petty cash fund avoids the need for making many entries for small amounts. Imprest, petty cash and other revolving funds office of. Petty cash funds are used to purchase items for your business, reimburse employees who purchased business items, or to make change.
This policy describes the purpose of a petty cash fund and the procedures to be followed for. Designate a custodian of a petty cash fund, and notify university accounting of that designee. The amount of petty cash also known as the petty cash fund. If petty cash funds are stolen, the custodian must inform the tac approver and file a report with.
Terms and condition of use no university petty cash facilities will be issued, or can be used, except in accordance with this policy. The type of fund and reporting category account code has four digits. Nonresearch petty cash, cash equivalents, and change funds counts are mandatory for each fund. To safeguard pettycashfund balances, and to ensure that transactions are made. Accounting will notify the custodian when the check is available for pickup. The transaction that replenishes the petty cash fund is recorded with a compound entry that debits all relevant asset or expense accounts and credits cash. This policy establishes the proper uses and administration of petty cash funds. The custodian then cashes the check and deposits the funds in the petty cash box, restoring the beginning balance of the petty cash fund.
Imprest, petty cash and other revolving funds are not budgeted because they represent working capital for expenditures that are properly budgeted in other funds. Petty cash a petty cash fund is cash loaned for the purpose of making small purchases where it is not reasonable to make a disbursement by check and purchases are impractical or unavailable through procurement and disbursements one card or expense reimbursement. The university cashiers office maintains a petty cash fund for use by all departments for. Approving each petty cash disbursement on a prenumbered petty cash request form. Petty cash procedure guide statement this policy establishes the proper uses and administration of petty cash funds. These funds should be used only when cash is the most cost efficient method of payment. The custodian will sign the departmental petty cash fund accountability. The banking may be handled locally, but the initial setup must be handled by accounting services. A petty cash fund may be established in a department when there is evidence that a continuing cash advance should be kept on hand to permit the purchase of lowvalue supplies. The petty cash fund can be operated in the following two ways. Scribd is the worlds largest social reading and publishing. A petty cash fund will undergo periodic reconciliations, with transactions also recorded on the financial statements. Petty cash funds shall be kept in a secure location at all times and acces sto the funds shall be restricte to the petty cash fund custodian and the alternate custodians. Student financial services may cash the petty cash fund check for the.
If the petty cash is not used all that often or if there is a larger amount in the box, you may never use all of the petty cash. Petty cash request form accountability for a petty cash fund should be assigned to one employee, designated as the fund custodian. Petty cash refers to a small amount of currency and coins that a company uses to pay small amounts without writing a check. Additionally, the request should indicate the account to be charged and be approved by the appropriate department manager or designee who is neither the fund custodian nor an employee reporting to the fund. The cashier creates a new check in the amount of the receipts, and swaps the check for the receipts. Establishment of petty cash funds a request for such funds must be made to the general accounting office, or in the case of a grant or contract to their. A petty cash fund is a cash fund kept secured for immediate use when a uvm purchase order or a uvm purchasing card cannot be used. Fund petty cash when cash is added to a petty cash fund, the basic concept is to replace the amount of any cash that had previously been disbursed from the fund. At this time, most district petty cash accounts are held at bank of america. The fund custodian is responsible for maintaining the fund in a safe manner, distributing cash to others upon request, obtaining supporting documents for disbursements made, and maintaining petty cash. If you decide to establish a petty cash fund, doing the following can help simplify your petty cash accounting responsibilities. Understand how to manage the daily operations of a petty cash fund, including. Finally, surprise petty cash counts should be made to maintain good internal control over the fund.
Special care must be taken to protect such funds from theft or misuse. Petty cash accounting involves establishing a petty cash policy, setting up a petty cash log, creating journal entries, and reconciling the petty cash account. Only when the fund is reimbursed, or when the end of the accounting period. Separate duties, so the person who is recording transactions is different from the person putting the transactions into your accounting system. This document is applicable to all temporary and permanent petty cash funds that are. One of the conveniences of the petty cash fund is that payments from the fund require no journal entries at the time of payment. Ref guide petty cash 0408 perelman school of medicine. This involves summarizing all disbursements made and issuing cash back to the fund for that amount. Petty cash account request form university of chicago. If a bank of america branch is selected, general accounting will. Recordkeeping for the audit process is maintained at the department level. It shall be maintained in the accounting divisionunit by fund cluster.
Advances including petty cash and accounts receivable. The petty cash journal entry is a debit to the petty cash account and a credit to the cash account. Companies replenish the petty cash fund at the end of the accounting period, or sooner if it becomes low. The establishment of a petty cash system begins by making out a check to cash. Entries are needed to 1 establish the fund, 2 increase or decrease the. Ensuring that the total of the actual cash in the fund, plus the total reimbursed petty cash forms, and receipts, represent actual expenditures equal to the total amount of the petty cash fund. Petty cash fund definition a small cash fund used to make incidental purchases where normal purchasing methods are not practical. Petty cash change fund reconciliation cash on hand currency 1. General information the two designations of imprest cash used at the university are petty cash and drawer cash. Ordinary system of petty cash fund under this system petty cashier is given a certain amount of cash for meeting petty expenses of the. Petty cash overview the office of the state comptroller administrative services division is responsible for approving petty cash requests and increases. Scribd is the worlds largest social reading and publishing site.
The reason for replenishing the fund at the end of the accounting period is that no record of the fund expenditures is in the accounts until the check is written and a journal entry is made. How to prepare a balance sheet expert advice on how to make a balance sheet for accounting, how to make balance sheet, preparation of balance sheet by grouping and marshaling of assets. Perform periodic, unannounced audits of the petty cash fund, and in. Petty cash is easy to steal, so make sure you protect it. The petty cash fund must be replenished by cashing a check to bring the drawer up to the originally funded amount. Define the purpose and use of a petty cash fund, and prepare. When a payment is to be made out of the petty cash fund, a petty cash voucher pcv is prepared by the petty.
Petty cash is also the title of the general ledger current asset account that reports the amount of the companys petty cash. Accounts payable website to the controller or designee for the initial petty cash fund. Use the petty cash fund form to change the petty cash custodian. Petty cash and change funds should not be deposited into a bank account, including the personal bank account of the petty cash custodian. However, it should be replenished at the end of the accounting period in order to ensure that all expenses are properly recorded. The foundation requires each petty cash fund to have an approved. Petty cash is a small amount of discretionary funds in the form of cash used for expenditures where it is not sensible to make any disbursement by cheque, because of the inconvenience and costs of writing, signing, and then cashing the cheque. Policy 050606 petty cash pittsburgh and regional campuses.