[GNC] Be careful with `petty cash'

[Michael or Penny Novack]

On 9/8/2020 11:32 PM, Adrien Monteleone wrote:
> I've seen suggestions in accounting texts (and use myself) an account 
> called 'Undeposited Funds' as a Current Asset. Checks and currency 
> destined to the bank (but not there yet) are recorded here when received.
>
> Regards,
> Adrien

Yes, the term "petty cash" has traditionally had a different meaning. In 
a very small business, might actually be currency but in a large one 
likely its own bank account. And a subsidiary set of books. The idea was 
to reduce the load on the treasurer/chief accountant and not clutter the 
main books with trivial detail.

In the petty cash books would be each transaction, each box of pencils, 
box of reams of paper, flowers for the boss's reception room, etc. Then 
say once a month the petty cash account would be "refreshed" with the 
total spent and each category of expense closed to the main books. Thus 
the parent "office supplies", "postage", etc.  and not each box of 
pencils or roll of stamps.

Michael D Novack