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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.