Question

On November 1, 20X1, a small business created a $200 imprest petty cash fund for day-to-day office needs. At the end of November, $37.30 remained in the petty cash fund. Also, receipts for expenses paid using petty cash totaled $162.70 and included the following items: $57.20 for take out pizza for a late night at office; $105.50 for train fare to attend meetings with clients. On November 30, 20X1, the fund was reimbursed for November’s expenditures. Prepare entries for November 20X1 relative to the imprest petty cash fund. Note: Accounts that may be used include Miscellaneous Office Expenses and Travel Expense.

Answer 1

Journal Entries

Nov 1,2011

Imprest petty cash fund A/c Dr $ 200

To Cash account $ 200

(Being $ 200 transferred from cash account to petty cash account for the nov month petty expenses)

Nov 30,2011

Miscellaneous office expense A/c Dr $ 57.20

Travel expense A/c Dr $ 105.5

To Expense payable $ 162.7

(Being expense for the month recorded in expense payable account)

Since it reimbursemnt account payable is coming, Otherwise direct petty cash entry is enough

Expenses payble account Dr $ 162.7

To Imprest petty cash fund A/c $ 162.7

(Being reimbursement of monthly total expense from patty cash account)

we have 2 option- Either keep the petty cash balance as it is (Then no entry required) Or transfer the petty cash balnce to the cash account, and next month new issue of $ 200

Entry will be,

Cash account Dr $ 37.3

To Imprest petty cash fund A/c $ 37.3

(Transfer of petty cash balnce to cash account at the month end)

Dec 1, 2011

Imprest petty cash fund A/c Dr $ 200

To Cash account $ 200

(Transfer of dec month petty cash allotment)

If First option is taking(keep the petty cash balance as it is) then only the balance amount will transfer to petty cash account. entry will be,

Imprest petty cash fund A/c Dr $ 162.7

To Cash account $ 162.7

(Transfer of dec month petty cash allotment to make the balance of $ 200)