PCLaw and Petty Cash Purchases

How you enter Petty cash purchases made on behalf of your firm, depends on:

1. Do you have an actual petty cash fund or are these purchases paid out of your own pocket?
2. Do you want to be reimbursed or do you want to offset these purchases against your drawings or equity?

If you have a petty cash fund, you reconcile the fund by totalling up the receipts, which should equal the missing funds. You then replace the funds by writing a general cheque for the total amount, account for the HST, and itemized the expenses and G/L accounts in the lower portion. Post any personal amounts to Draw. Make the cheque payable to yourself or Cash. Cash the cheque at the bank, and return the funds to the petty cash box.

For out of pocket expenses, I prefer to let PCLaw do the adding work for me. Gather up all the receipts. In Options - Systems Setting, change the default bank to petty cash. In Options - Workstation Settings, remove the checkmark from “Close data entry windows on OK”. You can now quickly write a series of petty cash cheques to post the expenses and HST. When you have finished the pile of receipts, change the default bank and “Close data entry”settings above back to the way they were before you started.

To reimburse yourself for petty cash, to a General Bank to Bank Transfer for the total amount that petty cash account is overdrawn.

To invest the funds in the business, post a Firm Receipt to the petty cash account for the total amount that petty cash account is overdrawn, and credit drawings or equity.

As always, I invite your comments and suggestions for future post topics. Next Posting – PCLaw And Credit Card Purchases.

Clyde