Petty Cash definitions Flashcards
Petty Cash definitions
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Petty Cash A small fund set aside to pay for minor, everyday business expenses without frequent journal entries. Custodian An individual appointed to manage, safeguard, and disburse funds from a petty cash account. Journal Entry A formal accounting record documenting the transfer or replenishment of funds, not each petty cash purchase. Cash Account The main company account from which funds are transferred to establish or replenish petty cash. Voucher A pre-numbered internal document used to track and authorize petty cash disbursements for control purposes. Receipt A proof of payment collected by the custodian to document each petty cash transaction. Internal Control Procedures, such as pre-numbered vouchers and receipts, designed to prevent misuse of petty cash. Replenishment The process of restoring the petty cash fund to its original balance by issuing a check for the amount spent. Cash Over and Short An account used to record minor discrepancies between petty cash on hand and documented receipts. Postage Expense A category for recording minor mailing costs paid from petty cash, tracked during fund replenishment. Supplies Expense A category for recording small purchases of office materials made using petty cash. Delivery Expense A category for recording minor shipping or courier costs paid from petty cash. Asset A resource owned by the company, such as petty cash, that provides future economic benefit. Equity The residual interest in company assets after liabilities, affected by expenses and petty cash discrepancies. Miscellaneous Expense A grouping on the income statement for small, irregular costs, including minor petty cash discrepancies.
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