Review and analyze petty cash transactions with an interactive ledger.
On 1 August 20X4 $73.42 of cash was added to the petty cash box to top it up to the imprest amount of $200 and on 8 August a further $114.37 was put into the box in cash. Cash payments during the week ending 7 August 20X4 were evidenced by the following vouchers.
Tea, coffee, biscuits.
Taxi
Window cleaner
Client lunch (including sales tax of $4.16)
Stamps
Boxfiles Papers (including sales tax of $2.90)
Rail fare
Stamps
Required: Complete the petty cash analysis for the first week in August 20X4 by filling in the shaded boxes overleaf.
| Date 20X4 | Receipts | Voucher/ reference no | Details | Total payment | Sales tax | Office expenses | Travel expenses | Postage | Stationery | Sundry | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $ | c | $ | c | |||||||||
| Balance b/d | ||||||||||||
| 1 Aug | Cash from bank | |||||||||||
| 1 Aug | 279 | Refreshments | ||||||||||
| 1 Aug | 280 | Taxi | ||||||||||
| 2 Aug | 281 | Window cleaners | ||||||||||
| 3 Aug | 282 | Client lunch | ||||||||||
| 3 Aug | 283 | Stamps | ||||||||||
| 4 Aug | 284 | Stationery | ||||||||||
| 4 Aug | 285 | Rail fare | ||||||||||
| 4 Aug | 286 | Stamps | ||||||||||
| Balance c/d | ||||||||||||
| 7 Aug | Balance b/d | |||||||||||
| 7 Aug | Cash from bank | |||||||||||
| 8 Aug | ||||||||||||
Fill in the Blanks Assessment
Complete all 8 blanks to submit your answers
Complete the sentences about petty cash and imprest systems
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Test your knowledge of banking payment methods
Complete the sentences about banking payment methods
Standing orders and direct debits are both methods of payment whereby the bank is instructed to pay a third party from a bank account. However, the main difference is as follows:
it is the payer who instructs their bank to pay a certain amount on a regular basis to the payee
it is the payee that instructs the bank of the payment and specifies the amount which may alter for each payment.
Credit cards and debit cards are both methods of making payments used by consumers. However the main difference is as follows:
is a means of purchasing goods without immediate payment. Payment is made on the total balance outstanding on the card sometime after the purchase has been made
is a method of making an immediate payment for purchases but without the need to write out a cheque. On payment with a
the purchaser's bank account is electronically debited immediately with the amount of the purchase.
Identify the parties involved in the cheque transaction
Examine the cheque below and identify the parties
74 High Street
Bristol
BS4 7DX
80-24-18
5 June 20XX
Pay J Fueller only
Seventeen dollars and 80 cents only
AM and JS Baker
Fill in the boxes with the names of each of the following parties to the cheque:
Test your knowledge of cash handling and banking procedures
Complete the sentences about banking money security procedures
It is important to keep cash, cheques and vouchers secure. If any are lost or stolen, this may result in financial losses to the organisation. Initially the various items tend to be kept in a and any excess amount should be regularly transferred to a during the day, keeping actual cash in the to a minimum.
Money, vouchers and so on should also be taken to the regularly to reduce the amount held on premises. This could be daily, every two or three days or other intervals depending on the amount received day to day. The timing of going to the bank should be so that there is not a regular pattern of visiting the bank.
are used to include details of cash and cheques and, usually separately, card vouchers. If the business accepts a number of cheques, it is usual to supply a which can be checked against the actual cheques by the bank to avoid or resolve problems.
If the home branch of the business is in another city, the amounts paid into the bank will need to be processed through the which may take several days before it reaches the home branch. On receipt, certain items will be 'cleared' such as This amount can be used immediately. Cheques paid into the bank are subject to clearance before the amount they represent can be used as cleared funds. This period provides sufficient time for the cheques to be returned if there are any technical problems with the cheque or there are in the account.
Additional Note: If the business has a large number of staff, should be used to pay wages and salaries into the bank accounts of the staff members. This reduces the amount of cash that needs to be maintained on the premises and avoids the need to write out numerous cheques or credit transfers.
You work for an organisation called Mainstream Co. In the post this morning, 12 July, the following remittance advice and cheque were received from one of your customers, Tarbick & Co.
74 Hartston Street, Brinton, SY3 5AZ
The receivables' ledger records for Tarbick & Co show the following position at 12 July:
A number of errors have been made on the remittance advice. Fill in the boxes below:
Yanlin Dempster runs a wholesale business supplying small medical items to chemists' shops, sports clubs and local businesses. All transactions are on credit. The transactions in the first month of trading are listed below.
(a) Complete the following bank account.
Woodside Rugby Club letter: e
Vans Galore: d, 2,000
Surgiplast: d, 150
Description: Drawings
Balance c/d: 7,785
Balance b/d: 1,000
Fill in the gaps to explain the principles behind the treatment of transaction (f)
The concept is the principle underlying the treatment of the owner's private expenses paid by the business. This concept requires the transactions of a to be recorded separately from those of the of a business.
Consequently, this payment could not be analysed as 'electricity' as it is not the electricity expense of the business. It may be thought of as a withdrawal of cash from the business by the owner.
The separate entity concept requires that business transactions be kept separate from the owner's personal transactions. When an owner uses business funds for personal expenses, this is treated as a withdrawal from the business, not as a business expense.