FNSACC321_322_421 Assignment-part-2

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Monarch Institute *

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ACCOUNTING

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Accounting

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Apr 3, 2024

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4

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Page 14 of 88 Activity 3: Petty Cash 3.1 T. Rade Petty Cash T. Rade operates a petty cash system as per its organisational procedures. Vouchers are checked and processed by the Petty Cashier and recorded in the Petty Cash Book. On 1 July, the Petty Cashier received cheque 4233 for $100 to establish the fund. In their organisational policy and procedure documents, T. Rade specifies that each expense is to be recorded on a separate voucher. During the following week, the Petty Cashier checked and paid the following amounts (GST inclusive), with each expense being on a separate voucher (starting at Voucher No. 1): 01/7 Tea & coffee $17.60 (GST Free) 01/7 taxi fare $7.70 02/7 Courier $11.00 02/7 stationery $4.40 04/7 Biscuits $9.35 04/7 taxi fare $9.90 06/7 Courier $5.50 06/7 stationery $3.30 07/7 Office cleaning $11.00 The fund was reimbursed on July 8 (cheque 4275).
Page 15 of 88 a. Use the information for T. Rade to prepare and balance the Petty Cash Book using the following template: Petty Cash Book - T. Rade Cash Received Date Particulars Vchr Payments Courier Amenities Station. Travel Sundries GST 100 Jul 1 Advance Tea & Coffee 1 17.60 17.60 Taxi fare 2 7.70 7.00 0.70 Jul 2 Courier 3 11.00 10.00 1.00 Stationary 4 4.40 4.00 0.40 Jul 4 Biscuits 5 9.35 9.35 taxi fare 6 9.90 9.00 0.90 Jul 6 Courier 7 5.50 5.00 0.50 Stationary 8 3.30 3.00 0.30 Jul 7 Office cleaning 9 11.00 10.00 1.00 Sub-Total 79.75 $ $15.00 $26.95 $7.00 $16.00 $10.00 $4.80 Bal. c/d 20.25$ $100.00 $100.00 $20.25 Bal. b/d $79.75 Jul 8 Reimbrsmt
Page 16 of 88 b. Use the following template to prepare the General Journal entries for: Establishment of the petty cash fund, and Reimbursement of the fund. General Journal T. Rade Date Particulars Debit Credit 01-07 Petty cash 100 Bank 100 Petty Cash advance cheq no 4233 GST Paid 4.80 Sundries 10.00 Travel 16.00 Stationary 7.00 Amenities 26.95 Currier 15.00 Bank 79.75 Reimbursement of Petty Cash Ch No 4275
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Page 17 of 88 3.2 Small business, in particular those that are owner-operated, often have informal ways of dealing with petty cash expenses. a. Instead of using a cash imprest system, list two alternative methods that could be used to deal with petty cash expenses which would still maintain the integrity of the relationship of the business’ financial systems. i. Collect the receipts from there small expenses and later draw a check to reimburse those expenses ii. Add the expenses to a loan account in payee’s name b. Why might a business review and update the way they treat petty cash expenses? Businesses regularly review and update their treatment of petty cash expenses to maintain accuracy, adapt to changing needs, prevent fraud, improve efficiency, comply with regulations, and enhance overall financial control.