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laura.livinghope

Adding Petty Cash Previously unrecorded

Posted By

Just switched over to SAGE 50c from a free software. We made the chart of accounts and set the modules to ready and have begun inputting our data from January.

The organization used a petty cash but didn't include it in their chart of accounts. I'm not even sure how they accounted for its replenishment each month.

My question now is:

How do I input the beginning petty cash (200$) for January? It was never included in the bank records, it was just money that was sitting in the till for years, getting replenished every month or so, but never accounted for.

If I use the general journal, I know I need to debit Petty Cash for 200$, but which account would I credit to make it all balance? This money is coming out of thin air. Help please!

  • 0
    "Thin air" is Sales for me. The money got there somehow, so Sales makes it accountable (and taxable)
    The bigger question is - how were all the expenses recorded that were paid for using this money "sitting in the till for years"?
  • 0 in reply to Debbie Klassen CGA
    They basically took all the receipts and recorded them as expenses to the appropriate account, and then wrote a check to themselves to replenish the petty cash at the end of the month.

    In any case, they've handed over the books to me, and I've made a new chart of accounts which includes a petty cash. However, I couldn't include the 200$ in January's opening balances because they wouldn't have matched the balance sheet for Dec 31st.

    So, what should I do now to record the petty cash? We have no sales, being a non-profit organization.
  • 0 in reply to laura.livinghope
    It's good that the expenses have been accounted for at least. Being a non-profit you may want to ask your accountant as I know there are specific rules to be followed. I would post this entry through the general journal dated January 1 and credit something like suspense or miscellaneous expense and make a note for the accountant about this at year end.

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