What is the transaction for petty cash? :confused:

Paid petty cash 102.23
Factory supply 25.07
Sales supplies 14.73
Factory miscellaneous expense 21.00
Sales miscellaneous expense 22.35
Administrative miscellaneous expense 19.08

Debit petty cash credit the other accounts

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Originally Posted by danielnoahsmommy

debit petty cash credit the other accounts

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I'm confused by your answer, can you please explain? As we always Debit / Exp and Credit / Cash (which we paid for any thing)

Thanks

Quote:

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Originally Posted by kathyalknsnis

What is the transaction for petty cash??:confused:

paid petty cash 102.23
factory supply 25.07
sales supplies 14.73
factory miscellaneous expense 21.00
sales miscellaneous expense 22.35
administrative miscellaneous expense 19.08

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Debit all the petty cash expenses and credit petty cash as it is a reduction of asset i.e. cash

Let us take a look at the word "PETTY" which means very small or somewhat which can
Be ignored. For example in stores we do evidence cases of "PETTY THEFTS" but we do not take these seriously and even forget to lodge FIR for same.
But since in accounting nothing can be ignored that easily. We maintain a "Petty Cash Book" to keep track of such expenses...
You are confused so as to determine what is "PETTY" for you... it has to be decided solely
By you as " SOMETHING WHICH CAN BE PETTY FOR AN ORGANIZATION MAY NOT BE PETTY FOR ANOTHER"
However on a general note, these cover very meagre amounts the payment of which cannot be delayed or which are of occasional nature.