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Queen's University
 

Petty Cash Processes

Petty Cash is set up to facilitate small purchases in departments.  The petty cash funds are kept separate from the departmental bank account(s). 

After a department is set up with a petty cash fund, receipts are collected for expenses paid out of the fund.  When a department requires replenishment of the petty cash, the receipts are sent to Financial Services attached to a Cheque Requisition form.  The amounts paid (receipts collected) are charged to the appropriate expense account(s) in the applicable department(s).  The cheque that Accounts Payable produces for the total receipts amount is then cashed to replenish the department’s petty cash fund. 

Prudent handling of the petty cash funds is the responsibility of the Department Head or designate.

When control of the petty cash funds changes from one person to another, it is suggested that the petty cash funds are counted by both the person that is passing on the responsibility and the person taking over.

If you have any questions on this information please either send an email to Finance@queensu.ca or call Financial Services at 613-533-2050.

 

Issuing a New Petty Cash                                                                       

The individual who will control the petty cash completes both the Petty Cash Application Formand a Cheque Requisition Form (with a notation on the form that it is for a new petty cash fund).  Both forms should be approved by the Department Head and submitted to Financial Services.

The Cheque Requisition form should be made payable to the individual controlling the petty cash. A cheque will be issued and the person, who is controlling the petty cash, will cash the cheque and supply the cash to the fund. 

Prudent handling of the petty cash funds is the responsibility of the Department Head or designate.

Petty Cash Application Form  

Example - Cheque Requisition form for a new petty cash fund

 

Replenishing Petty Cash                                                                                 

To replenish the Petty Cash, the following should be done by the person controlling the petty cash fund in the department:

1.  Total all of the receipts (amounts paid out of the petty cash fund)
2.  Fill out a Cheque Requisition Form
     - clearly mark, in the Description of Purchase section, on the form that it is to replenish petty cash

     - expenses, supported by receipts, should be charged to the appropriate chartfields for each expense

       expense accounts can be found on the Financial Services website at:

       http://www.queensu.ca/financialservices/support/accountsmove/idcodes/expenditures.html

     - each line item in the Account Information section should be the pre-tax amount spent (on the receipt) and

       the taxes paid should be added together and entered in the separate HST line on the form (make sure the

       total of the receipts equals the total on the form)

     - ensure the Cheque Requisition form is signed by an approved signing authority for the department
3.   Attach the receipts to the Cheque Requisition form
4.  Send the Cheque Requisition form and the receipts to Financial Services by inter-office mail

Financial Services will process the form and will send a cheque to the person controlling the petty cash funds.

The person controlling the petty cash funds will cash the cheque and replenish the petty cash fund.

Example of a Cheque Requisition form to replenish petty cash

 

Increasing Petty Cash                                                                                      

To increase the amount of petty cash, prepare a Cheque Requisition Form, similar to preparing one for a new petty cash account, and include a notation on the form that it is for an increase in petty cash.  Use the chartfield string: 10000-42098-101001on the Cheque Requisition form.

The form should be approved by the Department Head and submitted to Financial Services.  

The Cheque Requisition form should be made payable to the individual controlling the petty cash. A cheque will be issued and the person who is controlling the petty cash will cash the cheque and supply the cash to the fund. 

 

Closing Petty Cash                                                                                                       

When a petty cash is closed the funds are not deposited into the department’s account. 

The funds should be returned to Financial Services for deposit to the Petty Cash General Ledger account #101001. 

If there is only cash in your petty cash fund (i.e. all receipts have been expensed and repaid to your petty cash fund) then only a Deposit Transmittal form is required to deposit the cash and close the petty cash account. 

NOTE:  Make sure to indicate on the Deposit Transmittal that the Petty Cash account is to be closed.

If there are still outstanding receipts (i.e. receipts that have not been expensed and repaid to your petty cash fund), follow these instructions:

1.     Prepare a Journal Entry Form for the receipts and use the appropriate expense accounts. The off-setting entry will be a credit to the petty cash G/L account #101001.  Do not enter the journal entries in PeopleSoft – Financial Services will calculate the HST rebate on the expenses incurred and post the journal entries.

If you are unsure which expense account(s) to record expenses to, you can refer to the list of expense accounts at the following link:  http://www.queensu.ca/financialservices/support/accountsmove/idcodes/expenditures.html

2.     Fill out a Deposit Transmittal Form for the cash-on-hand amount and code to 10000-42098-101001.

  • Attach the Journal Entry, the original receipts, and the cash to the Deposit Transmittal. Make sure to note on the Deposit Transmittal form that this is to close petty cash and reference the department number.
  • The total amount of cash and the amount of the receipts on the Journal Entry will be added together and should total the amount of the petty cash originally issued. 
  • Deliver the required form, journal, receipts, and cash to Financial Services.  Please note that cash should NEVER be sent by inter-office mail.

Example of a Journal Entry and Deposit Transmittal to close petty cash

 

Verification of Petty Cash Funds By Financial Services                                    

Financial Services will communicate with all departmental contacts responsible for petty cash accounts on an annual basis to verify each department’s petty cash holdings.  This will be done in February of each year, and will confirm the petty cash balance of each applicable department as at January 31st.

This is done to verify that Financial Services still has the correct contact information for the person controlling petty cash in the department and to confirm that the correct amount is on the Petty Cash Listing spreadsheet maintained by Financial Services.

Kingston, Ontario, Canada. K7L 3N6. 613.533.2000