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Financial and Banking Processes (13932)

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1. Start a petty cash fund by writing a cheque to “Petty Cash.” Cash the cheque.

2. Physically place the cash in a petty cash drawer or petty cash box.

3. As you pay for expenses out of petty cash, keep an itemised list of each expenditure

4. When the cash is almost finished, add up the expenses on your itemised list.

5. Write another cheque to “Petty Cash” for the total of the expenses. That cheque should replenish the fund back to the initial balance. You decide to set up a petty cash fund to pay small expenses that you don’t pay by   cheque. You feel a petty cash fund of R100 is necessary, so you write a R100 cheque payable to “Petty Cash.” You physically place the R100 in a petty cash box. Make the following entry in your cash disbursements journal

Two weeks later, you review the petty cash box and find that there is R25 left. You add up the items listed on the expenditures list, and you are happy to find that they add up to R75 (25 + 75 = 100). You write a cheque, payable to “Petty Cash,” for R75. The cash is placed in the petty cash box. This replenishes the fund back to R100. Using the list of petty cash expenditures as your source document, make the following entry in your cash disbursements journal:

The petty cash drawer or box should be locked when not in use. Only one person should have access to the petty cash, so that one person is held accountable for it.