What is the petty cash account for?

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  • Updated 9 years ago
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I have seen a suggestion on this website to add an account called Petty Cash. Could someone explain to me how this would be used? Perhaps even give an example? Thanks.
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triggs399

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Posted 9 years ago

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cmchien, Official Rep

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I'm assuming that you're on Plus or Premium, where you can add Accounts. If that's the case, Petty Cash is used for tracking your actual cash--bills, coins, etc.

When you withdraw money from the ATM, you would do an Account Transfer from your Checking account (for instance) to Petty Cash. When you pay for things in cash, you would record it to the appropriate envelope plus Petty Cash as the Account.

Hope this helps.
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triggs399

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Okay. I get that. This sounds a little complicated though. Is there a better way to handle this situation? Example: My husband get paid bi-weekly and it is directly deposited into our checking account. On this day I go to the bank and make a cash withdrawal for $74 ($30-my fun money, $30-husband's fun money, $14-daughter's commission). I would prefer to not have an envelope for this money because it is not likely we would record our cash transactions this way.

Yes...we do have a Plus account.
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cmchien, Official Rep

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Got it. If you want your bank account to reflect properly, you will have to record the ATM withdrawal somehow.

If you don't want to track your Petty Cash--i.e., your cash is just your spending money--the other way to do it is to record a regular Expense transaction in bulk against your Checking account, instead of an account transfer to Cash e.g.:

Account: Checking
Total: $14
Split 1: Husband's Fun Money $30
Split 2: My Fun Money $30
Split 3: Daughter's Commission $14

You'll record it to the day of your withdrawal. And it will look, in EEBA, like it was all spent that day. But I assume that that tradeoff is OK with you since you prefer not to track cash transactions.