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  • Petty Cash Cycle

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    Mahmoud Abed Elbestawy
    5 views5 pages
    1. A prepayment is created for petty cash and a payment is made to clear the prepayment liability. 2. A standard invoice is then created and the prepayment is applied against this invoice to pay the amount owed. 3. The final journal entries show the invoice amounts debiting the correct expense accounts, with the prepayment amounts crediting the corresponding prepayment accounts to clear them out.

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    1. A prepayment is created for petty cash and a payment is made to clear the prepayment liability. 2. A standard invoice is then created and the prepayment is applied against this invoice to pay the amount owed. 3. The final journal entries show the invoice amounts debiting the correct expense accounts, with the prepayment amounts crediting the corresponding prepayment accounts to clear them out.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    5 views5 pages

    Petty Cash Cycle

    Uploaded by

    Mahmoud Abed Elbestawy
    1. A prepayment is created for petty cash and a payment is made to clear the prepayment liability. 2. A standard invoice is then created and the prepayment is applied against this invoice to pay the amount owed. 3. The final journal entries show the invoice amounts debiting the correct expense accounts, with the prepayment amounts crediting the corresponding prepayment accounts to clear them out.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 5

    Petty Cash Cycle

    1- Create Prepayment for Petty Cash

    2- Create payment of prepayment

    3- Create Standard invoice


    4- Apply prepayment to Standard
    Prepayment Journal
    Lin Accounted (SAR) Line
    Event Account Class
    e Debit Credit Description
    Prepayment 5,000.0
    1 Validated 01.000.1402013.000.000.01.00000.00000 Prepaid expense 0 Petty Cash
    Prepayment Nonrecoverable
    2 Validated 01.000.5143007.000.000.01.00000.00000 tax 750.00 Petty Cash
    Prepayment
    3 Validated 01.000.3102011.000.000.01.00000.00000 Liability   5,750.00 Petty Cash

    Payment of Prepayment journal


    Lin Accounted (SAR) Line
    Event Account Class
    e Debit Credit Description
    Invoice
    Number :
    Payment 5,750.0 Petty Cash-
    1 Created 01.000.3102011.000.000.01.00000.00000 Liability 0 prepayment
    Payment
    2 Created 01.000.1001003.000.000.01.00000.00000 Cash   5,750.00  

    Standard Invoice Journal


    Lin Accounted (SAR) Line
    Event Account Class
    e Debit Credit Description
    Invoice Petty Cash
    1 Validated 01.040.5133012.000.000.01.00000.00000 Item expense 200.00 Standard
    Invoice Nonrecoverable Petty Cash
    2 Validated 01.000.5143007.000.000.01.00000.00000 tax 30.00 Standard
    Invoice Petty Cash
    3 Validated 01.000.3102011.000.000.01.00000.00000 Liability   230.00 Standard

    Final Journal of Standard invoice after apply the prepayment


    Lin Accounted (SAR) Line
    Event Account Class
    e Debit Credit Description
    Prepayment
    Invoice
    Number :
    Prepayment Petty Cash-
    1 Applied 01.000.3102011.000.000.01.00000.00000 Liability 230.00 prepayment
    Invoice Petty Cash
    2 Validated 01.040.5133012.000.000.01.00000.00000 Item expense 200.00 Standard
    Invoice Nonrecoverable Petty Cash
    3 Validated 01.000.5143007.000.000.01.00000.00000 tax 30.00 Standard
    Invoice Petty Cash
    4 Validated 01.000.3102011.000.000.01.00000.00000 Liability 230.00 Standard
    Prepayment
    Invoice
    Number :
    Prepayment Petty Cash-
    5 Applied 01.000.1402013.000.000.01.00000.00000 Prepaid expense 200.00 prepayment
    Prepayment
    Invoice
    Number :
    Prepayment Petty Cash-
    6 Applied 01.000.5143007.000.000.01.00000.00000 Prepaid expense   30.00 prepayment

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