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What is Petty Cash ?
Petty cash is a small fund of cash kept on hand maintained by a custodian for purchases or reimbursements too small to be worth submitting to the more rigorous purchase and reimbursement procedures of a company or institution. Periodic reconciliations reveal any shortfall or overage in the fund, as receipts are used to calculate the fund balance.
Petty Cash Accounting Entries
The petty cash fund and petty cash transactions are still recorded on financial statements. When the petty cash fund is created, a journal entry simply restricts a small amount of money by…