Who establishes the petty cash fund?

petty cash custodian
Companies assign responsibility for the petty cash fund to a person called the petty cash custodian or petty cashier. To establish a petty cash fund, someone must write a check to the petty cash custodian, who cashes the check and keeps the money in a locked file or cash box.

What is the transaction when you establish a petty cash fund?

The petty cash journal entry is a debit to the petty cash account and a credit to the cash account. The petty cash custodian refills the petty cash drawer or box, which should now contain the original amount of cash that was designated for the fund. The cashier creates a journal entry to record the petty cash receipts.

How do you Journalize the establishment of a petty cash account?

To show this, debit your Petty Cash account and credit your Cash account. When the petty cash fund gets too low, you must refill it to its set amount. Then, create another journal entry debiting the Petty Cash account and crediting the Cash account.

How does a petty cash fund work once established?

To replenish a petty cash fund. When the fund is replenished, the credit to Cash is for the difference between the established amount and the actual cash in the fund. We would debit all vouchered items. Any discrepancy should be debited or credited to an account called Cash Over and Short.

How much is the Setterstrom petty cash fund?

Receipts: delivery expense $21.35, entertainment expense $48.20, and miscellaneous expense $29.80. On July 10, Setterstrom increased the fund from $105 to $135.

How much does the Setterstrom company make a year?

Receipts: delivery expense $21.35, entertainment expense $48.20, and miscellaneous expense $29.80. On July 10, Setterstrom increased the fund from $105 to $135. Prepare journal entries for Setterstrom Company.

When do you make an entry in a petty cash journal?

Only when the fund is reimbursed, or when the end of the accounting period arrives, does the firm make an entry in the journal. When disbursing cash from the fund, the petty cash custodian prepares a petty cash voucher, which should be signed by the person receiving the funds.

How does a business establish a petty cash fund?

A business establishes a petty cash fund by writing a check for, say, $100. It is payable to the petty cash custodian. The petty cash fund should be large enough to make disbursements for a reasonable period, such as a month.