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  #1  
Old 01-21-2006, 05:37 AM
Padmaster Padmaster is offline
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Petty Cash / Cash Account

I do the bookkeeping for my small business using Quickbooks Pro 2004. My accountant tears his hair out everytime he gets my files. I have to check on this procedure because I think it is wrong. I took out money from the checking account, say $100, to buy various supplies. Then I posted all of my receipts directly to the Petty Cash journal. What is the correct way to do this? I want to post all my small purchases individually because I sometimes find it helpful to see what I paid from certain stores. I think I'm not supposed to record these things to Petty Cash. Please advise. I will have to fix a lot of this type of posting before giving him my books or he'll go AARGGH again! Thank you.
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Old 01-21-2006, 07:17 AM
luinetti luinetti is offline
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Without hearing more about what's going on with your account, I don't know what more you could do.

Are you properly accounting for the balance of money that is not used for small purchases...such as maintaining a small "cash in the drawer" balance (separate account) to satisfy him that the $100 is accounted for.

Bill
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Old 01-21-2006, 11:14 AM
EL34 EL34 is offline
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I do the same thing as you.

Once in a while I have to pay out of pocket cash expenses such as taking garbage to the county recycling center,etc.

I get a receipt and then enter the receipt in the petty cash account.


My accountant has no problem with this, what's the problem?
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Old 01-21-2006, 06:55 PM
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lisa_mn lisa_mn is offline
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When you enter the withdrawal from your checking account, do you code it to petty cash? Then you can just enter the expenditures in the petty cash register. Your accountant shouldn't have any trouble with that.
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  #5  
Old 01-22-2006, 01:46 AM
Padmaster Padmaster is offline
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Well, the accountant says the Petty Cash account is a journal and I shouldn't post receipts in there. I don't know why this is a problem.

I do account for the balance of the money.

Maybe I should have a current asset account called "Cash Payouts" or some such name. I write a check for $100 and categorize it with this account. Then I can post all my receipts into this account.

I fail to see how this is different than the Petty Cash Journal but then I don't understand double entry accounting.

Thanks for your input.
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  #6  
Old 01-22-2006, 06:50 AM
RobJoy RobJoy is offline
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Your Petty Cash account should be set up as a QB Bank Account.

When you cash a check record it in QB as a check with Petty Cash as the expense heading, or a journal debit Petty Cash credit bank, or a transfer from bank to petty cash.

When you pay for stuff from petty cash you can either record a check from the petty cash account, or as a bill and bill payment from Petty Cash (just like when you pay for something with a real check from the bank). You might like to write 'Paid cash' on the receipt.

You should reconcile the Petty Cash now and then - once a month would be fine. Add up the cash in the tin, and use the Reconcile routine to reconcile this balance. For maximum probity post any significant reconciliation difference to your drawings account.

If your accountant is not happy with that, tell him to take a hike.
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Old 01-22-2006, 10:12 PM
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lisa_mn lisa_mn is offline
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I don't understand what he means that it's a journal. It's an account. What type of account is your petty cash account?
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  #8  
Old 01-22-2006, 10:13 PM
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lisa_mn lisa_mn is offline
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Maybe suggest that your accountant stop by here.
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  #9  
Old 01-25-2006, 06:55 PM
RobJoy RobJoy is offline
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I think your accountant wants you to pretend that bookkeeping doesn't move with the times. Back in the days of quill pens some poor sap would keep a petty cash journal - a written ledger, and the totals would be transferred to the accounts. But there's no point in entering your petty cash transactions in a paper journal or a spreadsheet as a separate exercise, you might just as well put them straight into QB. Why make two jobs of it?
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