Does your organization have petty cash? If so, what are the guidelines for using petty cash.?

Answer 1

Petty cash, also known as imprest cash, is a fund established for making small payments that are impractical to pay by check. Examples include postage due, reimbursement to employees for small purchases of office supplies, and numerous similar items. The establishment of a petty cash system begins by making out a check to cash, cashing it, and placing the cash in a petty cash box. A petty cash custodian should be designated to have responsibility for safeguarding and making payments from this fund. Policies should be established regarding appropriate expenditures (type and amount) that can be paid from petty cash. When a disbursement is made from the fund by the custodian, a receipt should always be placed in the petty cash box. The receipt should clearly set forth the amount and nature of expenditure. The receipts are sometimes know as petty cash vouchers. Therefore, at any point in time, the receipts plus the remaining cash should equal the balance of the petty cash fund (i.e., the amount of cash originally placed in the fund and recorded by the entry above).

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