Petty cash
Objective: Establish and replenish a petty cash fund.
Recommended first: Cash payments and checks
A petty cash fund holds a small fixed amount for minor purchases. Each payment is supported by a voucher. When the fund runs low, a check replenishes it — and only then are the expenses journalized.
The imprest system makes petty cash easy to check: at any moment, cash in the box plus vouchers should equal the fixed fund amount. A shortage or overage is recorded when replenishing, usually to a miscellaneous account. The Petty Cash account itself only changes if the business decides to make the fund larger or smaller.
Check your work
- Do cash on hand plus vouchers equal the fund amount?
- Are expenses recorded at replenishment?
- Did the Petty Cash account stay unchanged?
Vouchers: $45 supplies used, $20 courier. Replenish with a $65 check.
| Account | Debit | Credit |
|---|---|---|
| Supplies Expense | $45.00 | |
| Miscellaneous Expense | $20.00 | |
| Cash | $65.00 |
Common mistakes
✗ Crediting Petty Cash when replenishing.
✓ Replenishment credits Cash (the bank) and debits the expenses.
Guided practice
Use hints freely here.
Item 1 of 1
Establish a petty cash fund
On Mar 1, 2026, Northlight Design Studio writes check #415 for $400.00 to start a petty cash fund kept in the office.
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Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 2
Replenish petty cash
On Mar 28, 2026, Northlight Design Studio's petty cash vouchers show $68.00 for office supplies used, $28.00 for courier fees (miscellaneous), and $23.00 for a parking fee (miscellaneous). A check is written to replenish the fund.
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Key terms
- Petty cash
- A small cash fund for minor expenses.
References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.