1C: Petty cash transactions are recorded

Petty cash transactions should be recorded in either a hard copy petty cash book or, more
commonly these days, in an electronic petty cash spreadsheet. The book/ spreadsheet capture
all of the petty cash transactions in one place allowing them to be reconciled and providing a
single source of documentation. Each entry should have documentation to support it.

The format of a petty cash book/ spreadsheet will be determined by the accounting staff of each
business but they typically include the:
date of each petty cash transaction
reason for the expenditure (particulars)
name of the person who received the money
amount of any money provided to the petty cash (receipts)
amount of any payments made
total payments
balance remaining after payments have been made
total petty cash in the fund

Simple petty cash spreadsheet example:

SUPA-Office Accounting
Petty Cash Record

Date Particulars Received Receipts Payments

21/7/20XX Petty Cash Float $200

23/7/20XX B4 envelopes M Savage 11.89

25/7/20XX Light globes V Bright $12

Bus Fares
globes
27/7/20XX G. Polson $38
Taxi
27/7/20XX Milk& Sugar V Sweet $6.45

Total payments

Balance unspent

Total PC $200

Some businesses also choose to break down the payments into categories, for example stationery,
catering, travel. These items can be recorded in additional columns placed to the right of the
payments column in the example shown. Categories help to provide greater information to the
accounting staff about what the petty cash is being used for.

SUPA-Office Accounting
Petty Cash Record
Spending area (optional)
Date Particulars Received Receipts Payments Travel Catering Stationary other
21/7/20XX Petty Cash Float $200

23/7/20XX B4 envelopes M Savage 11.89 11.89

25/7/20XX Light globes V Bright $12 12.00

Bus Fares
globes
27/7/20XX G. Polson $38 38
Taxi
27/7/20XX Milk& Sugar V Sweet $6.45 6.45

Total payments

Balance unspent

Total PC $200

Recording transactions
When completing the petty cash book/ spreadsheet the person in charge must make sure that the
totals for each of these additional columns add up to the same amount as the total payments. They
must also make sure that the original petty cash float (also referred to as an advance) minus the
total payments equals the balance unspent and that the total payments plus the balance unspent
equals the total petty cash/ original petty cash float.

Using a software program such as Microsoft Excel, Quikbooks or MYOB can make the task of recording
and reconciling petty cash transactions much easier than if a manual method were used. By creating
a template and building formulas into it, the software performs the calculations automatically and
alerts the person in charge if an error has been made. Using software helps to eliminate human
error; however, careful checking is still required.

The time period that petty cash is reconciled can also vary from business to business but monthly is a common
time frame.

Now complete the learning task below. (called task 3 in the activities tab)

You are the person in charge of the petty cash for your department and you need to enter some
transactions into your petty cash book. You were given $150 to start as the petty cash float. Enter
the float, the four transactions from Activity 1 (Dianne Bunning used the entire $50 to purchase
stationery). Balance the transactions when you have finished.

Date Particulars Received Receipts Payments

Total payments

Balance unspent

Total PC