Petty Cash Journal Entries
Quick Answer
Petty cash is established by transferring funds from the main cash account. Replenishment entries record expenses based on receipts, adjusting for cash short or over. The imprest system maintains a fixed fund balance.
1. Establishing the Petty Cash Fund
Dr. Petty Cash — $500
Cr. Cash — $500
(Establishes $500 petty cash fund)
Cr. Cash — $500
(Establishes $500 petty cash fund)
2. Replenishment (Receipts Method)
When fund runs low, check receipts and record expenses:
Dr. Office Supplies — $45
Dr. Postage Expense — $32
Dr. Miscellaneous Expense — $23
Cr. Cash — $100
(Total receipts = $100; fund stays at $500)
Dr. Postage Expense — $32
Dr. Miscellaneous Expense — $23
Cr. Cash — $100
(Total receipts = $100; fund stays at $500)
3. Cash Short or Over
If receipts + remaining cash ≠ fund amount:
Cash short (missing $5):
Dr. Office Supplies — $45
Dr. Postage — $32
Dr. Cash Short/Over — $5
Cr. Cash — $82
Cash over (extra $3):
Dr. Office Supplies — $45
Dr. Postage — $32
Cr. Cash — $80
Cr. Cash Short/Over — $3
Dr. Office Supplies — $45
Dr. Postage — $32
Dr. Cash Short/Over — $5
Cr. Cash — $82
Cash over (extra $3):
Dr. Office Supplies — $45
Dr. Postage — $32
Cr. Cash — $80
Cr. Cash Short/Over — $3
4. Increasing the Fund
Dr. Petty Cash — $300
Cr. Cash — $300
(Fund increased from $500 to $800)
Cr. Cash — $300
(Fund increased from $500 to $800)
