Subject: Other
A government office required to pay different types of petty expenses daily. It is impractical and inconvenient for paying such petty expenses, like bus fair, cartage, and postage stamp through cheque. To pay such petty expenses directly in cash, every government office creates petty cash fund. All petty expenses are paid through this fund and their records are made in a separate book, which is known as petty cash book. Hence, the petty cash book is one in which all small items of expenses are recorded in a systematic manner made through petty cash fund.
Petty cash fund is an amount kept by government offices for meeting petty expenses. The petty cash fund is also known as float, which means fixed amount meant for meeting petty expenses. The government accounting system has provided for creating petty cash fund as per the requirement of the office. All the petty expenses incurred are recorded in a form coded A.G.F. No. 22, which is called petty cash book or petty cash fund account. These types of expenditures occur in government offices frequently. For making payment of such small amount of expenditures in cash, a fund is created by the office, which is known as petty cash fund. All the petty expenses are paid through this fund. These expenses are recorded in a separate book systematically which is known as petty cash book.
The following are the main objectives of petty cash fund:
The importance and advantages of petty cash fund are as follows: -
The following types of forms are used for operating the petty cash fund: -
Petty cash fund enter the following transactions into petty cash book:
Date |
Transactions |
Amount (Rs.) |
Kartik 1 |
Cash balance as per petty cash book |
400 |
Kartik 5 |
Payment for water supply charges |
50 |
Kartik 8 |
Payment for wages for repairs and maintenance |
60 |
Kartik 10 |
Payment for refreshment expenses |
15 |
Kartik 15 |
Payment for telephone charges |
20 |
Kartik 20 |
Payment for purchase of stationery |
50 |
Kartik 25 |
Payment for purchase of pens |
25 |
Kartik 30 |
Above expenses were reimbursed |
|
Solution:
Government of Nepal | AGF No. 22 | |
………………. Office/ Dept./ Ministry | ||
Petty Cash Fund Account |
Date | Particulars | JV No. | Debit | Credit | Dr./Cr. | Balance |
Kartik 1 | Balance b/d | 400 | ||||
Kartik 5 | Payment for water supply charges | C.P.S. No. | 50 | Dr. | 350 | |
Kartik 8 | Payment for wages for repairs and maintenance | C.P.S. No. | 60 | Dr. | 290 | |
Kartik 10 | Payment for refreshment expenses | C.P.S. No. | 15 | Dr. | 275 | |
Kartik 15 | Payment for telephone charges | C.P.S. No. | 20 | Dr. | 255 | |
Kartik 20 | Payment for purchase of stationery | C.P.S. No. | 50 | Dr. | 2-5 | |
Kartik 25 | Payment for purchase of pens | C.P.S. No. | 25 | Dr. | 180 | |
Kartik 30 | Reimbursement of petty | 220 | Dr. | 400 |
Enter the following transactions into petty cash book:
Date |
Transactions |
Amount (Rs.) |
Baishak 1 |
Create petty cash fund |
500 |
Baishak 7 |
Purchase of stationery |
50 |
Baishak 9 |
Postage and telegram |
40 |
Baishak 11 |
Expenses of tea |
25 |
Baishak 13 |
Telephone charges |
30 |
Baishak 17 |
Payment for water supply charges |
60 |
Baishak 25 |
Wages for maintenance |
15 |
Baishak 31 |
Above expenses were reimbursed |
|
Government of Nepal | AGF No. 22 | |
………………. Office/ Dept./ Ministry | ||
Petty Cash Fund Account |
Date | Particulars | JV No. | Debit | Credit | Dr./Cr. | Balance |
Baishak 1 | Create petty cash fund | Dr. | 500 | |||
Baishak 7 | Purchase of stationery | C.P.S. No. | 50 | Dr. | 450 | |
Baishak 9 | Postage and telegram | C.P.S. No. | 40 | Dr. | 410 | |
Baishak 11 | Expenses of tea | C.P.S. No. | 25 | Dr. | 385 | |
Baishak 13 | Telephone charges | C.P.S. No. | 30 | Dr. | 355 | |
Baishak 17 | Payment for water supply charges | C.P.S. No. | 60 | Dr. | 395 | |
Baishak 25 | Wages for maintenance | C.P.S. No. | 15 | Dr. | 280 | |
Baishak 31 | Above expenses were reimbursed | 220 | Dr. | 500 |
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