Cheryl SchultzParticipant3 months ago
when petty cash spent in a bar/restaurant was income
So I’ve been trying to figure this out for a while now-I am doing books for a bar/bistro and they pay expenses out of the “petty cash” account/til drawer. That drawer held not only the beginning balance of petty cash, but also income made that day from sales.
I have a petty cash register set up in Quickbooks Online and it’s all set up correctly, the expenses have been put in, and cash withdrawals from the checking (bank) are accounted for also in petty cash (bank). I’ve done a monthly Journal Entry to move the costs of expenses to the income account – but now my petty cash register is showing exactly the balance of all deposits from the bank. Is this right? If not, how do I get the petty cash register to equal the base amount always in petty cash? ($500 instead of $9290).
Help please. We need to do taxes and I want this right. I’m not a certified bookkeeper or CPA, but have been doing books for years . This one is just too complicated for my brain to figure out – or maybe it’s ok and it just looks bad in the register and all the reports will be fine…….
Please let me know what you know if you’re a CPA or knowledgeable on this! THANKS!!!!!!!!!!!!!!!!!2 Replies
Crystalynn SheltonParticipant2 months, 4 weeks ago
Hi Cheryl, it sounds like you’ve got a pretty good handle on petty cash transactions. Kudos to you for that! In order for your petty cash account to go back to the original $500 balance, you need to transfer the amount that should be income to the actual bank account where the money was deposited. I’m a bit confused as to why that money was recorded in petty cash in the first place. However, that’s how it should be handled.
Best of luck,
Cheryl SchultzParticipant2 months, 4 weeks ago
Thanks. The deposits to petty cash account are from when they withdrew money from the bank to replenish the til. Expenses were attributed back out to income in QB so all that is left is the withdrawals from the bank to replenish and deposit into petty cash. I’m talking about the petty cash transaction in quick books not the actual one at the bar. They balance the til (petty cash) regularly.
I.e. $25 gets paid to the liquor store out of the petty cash/til in the bar. The QB transaction involves the liquor cost of goods expense and petty cash (maybe I should have put it to income and not had a petty cash account in quickbooks, but am now retracing my steps). That $25 now needs a transaction in QB incolving petty cash acct. and sales income. Next $25 was withdrawn from the bank to replenish the til and that transaction goes into petty cash acct in QB so after I move the expense to income, it leaves that withdrawal from the bank into PC on the balance. Make sense?
If I hadn’t set up a petty cash account and just offset the expenses to income on the other side, what would I do with those withdrawals from the bank? Maybe nothing…just accept them in the bank account…
I saw somewhere that as long as the deposits and withdrawal transactions were bank to bank, it didnt matter that there is a balance in there… I want to reconcile the petty cash account though in QB since I set it up and reports to be right.
If it’s better and less confusing to redo the whole thing by eliminating the PC account in QB I have to do it now because our taxes are being done soon and want it cleaned up.
Thanks! Appreciate some wise help here.2 Replies