CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 5-4 Petty Cash

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 5-4 PETTY CASH An amount of cash kept on hand and used for making small payments Makes small payments time and cost effective Amount of money varies from one business to another Petty cash account is an asset with the same properties as cash Check is written (as the source document) to establish the petty cash fund Money is put in a locked petty cash box page 138

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON Write the date. ESTABLISHING A PETTY CASH FUND page 134 August 19. Paid cash to establish a petty cash fund, $ Check No Write the title of the account debited. Record the amount debited. 3.Write the title of the account credited. Record the amount credited. 4.Write the source document number in the Doc. No. column

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning PETTY CASH SLIP A form showing proof of a petty cash payment Used each time a small payment is made from the petty cash fund Have to have evidence of the money leaving the business Slips are left in the petty cash box until the fund is replenished Journal entries are not made for individual petty cash payments 4 LESSON 5-4

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 5-4 MAKING PAYMENTS FROM A PETTY CASH FUND WITH A PETTY CASH SLIP page 135

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON Write the date. REPLENISHING PETTY CASH page August 31. Paid cash to replenish the petty cash fund, $30.00: miscellaneous expense, $20.00; advertising, $ Check No Write the source document number in the Doc. No. column. 3.Write the title of the account credited. Record the credit amount. 2.Write the title of the first account debited. Write the debit amount. Write the title of the second account. Record the debit amount. 2 3