Illustrative Problem:

Nov. 2 A petty cash fund was established in the amount of P 1,000.

3 Supplies bought from Malayan and paid for, P150. PCV #1.

4 Repair of computer by Marcov, a computer technician for P150, PCV #2.

5 Advertisement in Philstar, P300, PCV #3.

7 Freight of merchandise bought and paid to LBC, P50, PCV #4.

8 Freight of merchandise sold and paid to Allied, P150. PCV #5.

9 Cash withdrawal by the owner, Ms. Roces, P100. PCV #6.

10 Replenishment.

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 PETTY CAS H BOOK
PETTY CASH DISTRIBUTION OF PAYMENT
DATE EXPLANATION PCV RECEIPT PAYMENT FREIGHT FREIGHT S UPPLIES S UNDRY AMOUNT
NO. IN OUT ACCOUNT TITL E
Nov. 2 Established Fund, check
no. 12657 P1,000
3 Paid National Store 1 P 150 P150
4 Paid Fred Marcov 2 150 Repair Expense P150
5 Ad in Philstar 3 300 Advertising expense 300
7 LBC Cargo 4 50 P50
8 Allied Freight 5 150 P150
9 Cash Withdrawal 6 100 Roces, Drawing 100
P1,000 P900 P50 P150 P150 P550
Balance 100
P1,000 P1,000
10 Balance P100
Replenishment 900

The f o l l o wi ng pr o c e dur e s a r e t o b e o b s e r v e d:
1. The amount of cash established is placed under the PCF Receipt (P1,000) with the appropriate date and explanation
column filled in.
2. The disbursement is recorded in the Petty Cash Fund Payment column (P150), the same amount extended to the
disbursement column at the right (Supplies P150). The date, explanation and petty cash voucher number column are
filled up.
3. Before the petty cash fund is to be replenished, all the money columns are totaled (starting with P50). After the
payments are proved (that, it is equal to the total payment of P900), the distribution columns are double ruled.

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4. In the petty cash fund receipt and payment column, the cash balance (P100) is placed in the payment column, then
totaled and double ruled.
5. On replenishment date, after double ruling, the cash balance (P100) is brought forward to the receipt column and the
replenishment amount is entered (P900) making the actual cash equal to the total fund of P1,000.
The petty cash book is again ready for another set of payments.

Note: The petty cash book is not a book of original entry, hence there are no debit columns or credit columns. The
entries are entered in the Journal as follows:
Date Particulars/Explanation Debit Credit
No v . 2 Petty Cash Fund P1,000
Cash in Bank P1,000
To establish petty cash fund.

10 Freight in 50
Freight out 150
Supplies 150
Repair expense 150
Advertising expense 300
Roces, Drawing 100
Cash in Bank P 900
To record replenishment.