Share this content
5

Petty Cash

Didn't find your answer?

Hi, i am hoping for an easy answer to a petty cash question. I am a bit confused on how to record money received into Petty cash in Xero. We have done a charity event at work and received cash contributions. I banked this money so i can pay out of our bank into a chosen charity bank account. I am unsure as to what nominal code to use when recording such transaction? will it be a current liability account like Other Creditors? Thank you!

Replies (5)

Please login or register to join the discussion.

By Duggimon
01st Apr 2020 14:09

Cash received goes in to the cash account, cash banked comes out of the cash account. It should be a current asset/bank account, cash can't be a liability, you can't have negative cash.

Thanks (0)
By johngroganjga
01st Apr 2020 14:17

I assume you are asking what is the opposite credit entry to the debit entry you have made in the bank account. If you are about to pay the sum out to a charity, I would put the credit where you expect to put the debit when you make the payment.

Thanks (1)
Replying to johngroganjga:
avatar
By NatBee
01st Apr 2020 14:38

Hi, yes thank you. I guess the question is what is the appropriate NL in such instance? Should this be a liability account or equity? or it does not matter as long as the opposite entry is coded to the same account?

Thanks (0)
avatar
By Manchester_man
01st Apr 2020 14:52

The cash collected and banked = Dr bank / Cr current liabilities. I suppose one could argue that it’s not yet a liability of the company, therefore credit a P&L account (sundry income).

If it’s going to be paid out straight away, it really doesn’t matter, as whichever account you credit will be debited when the funds are paid out.

Thanks (1)
Replying to Manchester_man:
RLI
By lionofludesch
01st Apr 2020 16:13

Manchester_man wrote:

The cash collected and banked = Dr bank / Cr current liabilities. I suppose one could argue that it’s not yet a liability of the company, therefore credit a P&L account (sundry income).

If it’s going to be paid out straight away, it really doesn’t matter, as whichever account you credit will be debited when the funds are paid out.

"Contra" is the account I'd use.

The money in should eventually equal the money out.

Thanks (0)
Share this content

Related posts