12 BL^LLETIX 178, U. S. DEPAETMEXT OF AGBICULTURE, 



PETTY CASH. 



Should it be necessary to keep a small amount of cash on hand to 

 cover petty cash disbursements, the Imprest System of handling 

 these disbursements should be adopted. 



A petty cash fund should be created to liquidate items not con- 

 veniently paid by check, by drawing a check for an even amount in 

 favor of the petty cash fund or the cashier, sufficient to meet the 

 requirements for petty cash expenditures for a certain period, say, 

 one Aveek. A receipt should be taken for each disbursement, and a 

 record of these payments should be made on a specially ruled en- 

 velope or in a petty cashbook. At all times the cashier must have 

 in the pettj^ cash fund the difference between the original amount of 

 the check and the total of the items disbursed, as shown by the 

 receipts. From time to time, as the amoimt of cash becomes small, 

 the receipts are totaled and presented to the proper official for 

 approval. A check is then drawn for the total amount of these 

 receipts, which are charged to the proper accounts. The petty cash 

 fund is thus restored to its original size. The receipts are then ini- 

 tialed and placed in an envelope, which is filed away so that the 

 receipts are accessible for auditing at the end of the year. 



THE EXPENSE ACCOUNT. 



Some organizations segregate their expense items under but two 

 or three headings, using general expense as a miscellaneous account 

 to which all expense items not coming under one of the few specific 

 expense headings are charged; others go to the other extreme of 

 opening many ledger accounts to make a segregation of the expense 

 account, thus increasing the work in the ledger materially both in 

 posting and in abstracting the trial balance. A better plan is to 

 provide but one column for expense in each book of original entry, 

 where needed, notation being made in the " Explanation " column 

 indicating the segregation to be made. For the distribution of these 

 items, a columnar book large enough to allow a column for each ac- 

 count is used, the headings being inserted for such segregations as 

 desired, such as salaries, labor, inspector's expense, postage, adver- 

 tising, telegrams and telephone, repairs, office supplies, and sta- 

 tionery. 



It is not enough to show that certain disbursements were made 

 on account of expense, but proper segregation should be made in 

 order to show the expenditures for each class. This is especially true 

 of subclassifications kept for statistical use, and comparisons of one 

 year with another. These comparisons are useless unless all charges 

 are entered under similar heads from vear to vear. 



