Set up a Petty Cash Float

The business wants to establish a petty cash float of 300 using money withdrawn from its the bank account.

How to Record the Set up a Petty Cash Float

The accounting records will show the following bookkeeping entries when the business withdraws cash to set up a petty cash float:

Petty Cash Float Journal Entry
Account Debit Credit
Petty Cash 300
Cash 300
Total 300 300

Petty Cash Float Bookkeeping Entries Explained

Debit – What came into the business
Cash came into the business in the form of petty cash.

Credit – What went out of the business
Cash went out of the business checking account when it was withdrawn

The Accounting Equation

The accounting equation, Assets = Liabilities + Capital means that the total assets of the business are always equal to the total liabilities plus the equity of the business. This is true at any time and applies to each transaction. For this transaction the Accounting equation is shown in the following table.

Petty Cash Float Accounting Equation
Assets = Liabilities + Capital
Petty Cash – Cash = None + None
300 – 300 = 0 + 0

In this case one asset (petty cash) will have increased and another asset (cash) will have decreased by same amount. The entry simply records the movement of money in the business from cash to petty cash.

Popular mdct.ru Examples

Another mdct.ru example for you to discover.

Set up a Petty Cash Float September 28th, 2017Team

You May Also Like


Related pages


calculating contribution margin ratiopaid in capital in excess of par balance sheetcost markup calculatorgoods receiptedhow to do unadjusted trial balancehow to do fifo methodflexible budget exampleallowance method write offaccounting correcting entriesunearned revenue in income statementthree column cashbookhow to calculate the quick ratiopresent value of cash flows in excelfuture value of an annuity exampletrade discount accountingvertical analysis income statement examplecumulative compound interest formulainventory turns calculatorprintable ledger sheetpv of annuity due calculatorfinancial statement analysis quizoperating leases accountingtimes interest earned ratio definitionwhat is accounts receivable turnoverperpetuity examplespatent intangible assetformula for annuity future valuehow to establish a petty cash fundprepaid insurance ismarkup ratio formulabond repayment schedulegross margin percentage calculatorledger entry in accountingpayable ledger control accountaccounts receivable calculatordeferred expense journal entryreceived advance payment journal entryfifo exampleswcr working capitalpresent value of lump sum tableexcel formula for discount percentagedebt to equity ratio calculatorhow to calculate gearing ratiocredits vs debitscalculating profit margin in exceltrial balance for dummiesprofit margin per unit formulaprovision for bad debts income statementjournal entry for bank loan with interestexcel cash flow formulaaverage account payable formuladefinition of retained profitprepayment journal entriescalculating ending retained earningswhat is factoring in accountingjournal entry of provision for doubtful debtsmanufactoring overheadnonprofit bookkeeping & accounting for dummies pdfequation for gross profitassets liability and equityaccounting consignmentformulas for simple interest and compound interestwhat is mirr in financedebit to accounts payablevertical common size balance sheethow to compute inventory turnoverdeferred income double entrychart of accounts excelbookkeeping tutorial philippinesbalance sheet spreadsheetbookkeeping debits and creditsaccounting contra accountsretained earning on balance sheethow to calculate fifodouble entries in accountingvariable cost formula per unithorizontal analysis of income statement and balance sheetpetty cash reconciliation formpv table annuity dueintangible assets accounting treatment