Thursday, May 7, 2009

Petty Cash Fund Balances

What is the accounting treatment if the expenses to be replenish the petty cash funny is higher than the petty cash fund balance?

Accounting primarily concerns the logical flow of funds. If the petty cash fund is $300 at the end of an accounting period, and the petty cash vouchers account equals $350, then petty cash owes someone $50.

You cannot have negative cash in accounting journal account. In this situation with the petty cash account, someone took cash out of their own pocket, and put a voucher in the petty cash boxes with the intention of being repaid by the company.

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