Generally the way petty cash works is when you replenish the petty cash you would code your receipts taken out of petty cash when you record your cheque to make up for the balance depleted out of petty cash.
Hope this helps!

I dont really understand what you mean by coding receipt.

The expense receipts which were paid out of petty cash.

I know its the expense receipt but what is "code" you mean post?

Account numbers to post to!

ok yes you would post the receipts to their corresponding accounts...that I was going to do. But do you do that in the GJ? I would assume that is the best way?

Why would use the general journal when you are writing a cheque or paying cash to replenish the petty cash or record any purchase? Use the payables module to be consistent! It is easier for reconciliation purposes and recording any purchase transactions. Having to looking it up is easier each time because it is a purchase. Would it not be logical to put it into purchases?

To answer your question I think what I mentioned above is the better way, however, it is up to you to decide what is easiest for you.

There are several ways the Petty Cash was being dealt with in the past but this is the latest way the other girl was doing it:

Paid by: Cheque from Bank Account
Vendor: Petty Cash
Item Description: Reimburse Petty Cash Fund
Account: 1050 Petty Cash

I don't know if that is what you mean but if I do that, the receipts are not showing up in their respective categories, it's all bunched up in Petty Cash Account so how do I Account for GST and how do I claim the expense? I think I'm missing a step here.

I'm sorry i kind of feel out of it and I know you told me what to do and I know for you it's clear but my brain is not grasping it. I feel lost and thats not me usually so what piece of info am I missing?

What you are saying above would be incorrect unless the Petty Cash was increased by that amount. Here are some examples:

receipts in petty cash box add up to $113. One for $56.50 office supplies & one for COD parcel $56.50

Dr Office Supplies Expense $50.
DR Postage/Courier Expense $50
Dr GST/HST $13.
CR Bank $113.

The Petty Cash Account only is affected by it being increased or decreased. E.G. Petty Cash is increased by $100.
Dr Petty Cash $100
Cr Bank $100

Hope this is understandable to you now!

Unknown said:

What you are saying above would be incorrect unless the Petty Cash was increased by that amount. Here are some examples:

receipts in petty cash box add up to $113. One for $56.50 office supplies & one for COD parcel $56.50

Dr Office Supplies Expense $50.
DR Postage/Courier Expense $50
Dr GST/HST $13.
CR Bank $113.

The Petty Cash Account only is affected by it being increased or decreased. E.G. Petty Cash is increased by $100.
Dr Petty Cash $100
Cr Bank $100

My question is:

The Vendor would be Petty Cash like she used to do? If so the entries would look like this once its posted:

1050 - Petty Cash Dr100

2315 - GST Paid 13. Dr

1065 -  Cash- Royal Bank Cr 113

But if I do that, although the description does say office supplies and postage, my office supplies and Postage accounts do not see those 50$ expenses and My Petty Cash is Debited meaning I am adding 100 in the petty cash but nothing is coming out...  I'm missing a step!!!

What I do not understand is why can't the method of payment be CASH and the Bank account be Petty CASH (there is no such option)?  This way I could do a normal PO, for the correct vendor and using the correct account (office supplies and Postage) paid by cash meaning that my Petty cash would go DOWN (cr) which is what actually happens in real life, I took money OUT of my petty cash to pay those receipts.  then when Im ready to replenish the Petty Cash I would create a PO and the vendor would be Petty cash, the account Petty Cash and paid by Cheque out of Bank... this way my Petty Cash account would go UP (dr) and my Bank would go DOWN (cr)

I feel stupid but I am certainly missing an important piece of information to be that lost so can you give me example by using step one, open AP module, step 2 create Purchase invoices using vendor ###, step 3... step 4... (just an example) we might not be talking about the same steps and Im a visual person so if you just say you have to credit this and debit this it might not work for me.

Sorry i feel like a pain

I do appreciate your input

Initially when Petty Cash is set up you Dr Petty Cash account for say $500. and Credit the Bank Account for $500. This entry would be put through the purchases journal in Sage 50 payable to the individual in charge of the petty cash box in which this individual would have to go to the bank to get $500. cash. What you should have at this point is $500. sitting in your Petty cash box. This amount now stays in your ledger for perpetuity unless you increase or decrease it in value say to $1000. Your entry would be Again DR Petty cash $500 and CR Bank $500 payable to an individual looking after the petty cash box.

Now lets spend money out of the Petty cash box - say $56.50 cash for postage and $56.50 cash for office supplies. How much money is left in the petty cash box? $500-$113.= $387.

Now I want to replenish the petty cash back to $500. What do I do? I need to go to the bank and withdraw $113. or write a cheque to the person in charge of the petty cash box to bring my petty cash box up to $500. How do I reflect the transaction? Is it not $50 DR postage plus $50 DR office supplies plus $13. DR HST and CR Bank $113 using your purchase journal in Sage 50?

I hope this clarifies how Petty cash works!