What is Petty cash? It is a small quantity of cash at hand that is used for reimbursing small amounts payable, rather than writing a check. Petty cash is also known as a petty cash fund.
To record the reduce the fund is:
Debit Cash – 25
Credit Petty Cash Fund - 25
To reduce petty cash funds from $ 200 to $ 175 is to reduce cash by $ 25 (credit petty cash fund - $ 25)
In conducting a business transaction, the company does not always spend large funds to pay for something. Without realizing it, companies can also spend money with a relatively small nominal but the quantity is large. Even though the amount is small, every money that comes out needs to be made bookkeeping to facilitate a company accountant in the company's financial records.
The bookkeeping will later be used to record every expense made by the company in a nominal amount that is not too much, then petty cash.
The benefits of Petty Cash are as follows:
There are several petty cash methods, which are as follows:
Imprest Fund System
It is a petty cash bookkeeping method in which petty cash accounts are always constant because the amount of replacement is proportional to the expenses that have been made so that the petty cash balance always remains as before.
Fluctuating Fund System
It is a method of charging and controlling finances where the amount is always changing. In the fluctuation method of replenishing the balance does not have to be as big as the expenses made. That is why petty cash balances always change.
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Petty cash https://brainly.com/question/13097325, https://brainly.com/question/14256242
Details
Class: College
Subject: Business
Keyword: Petty cash.
