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Handling Petty Cash

Handling petty cash and other small miscellaneous expenses can be a challenge.

Petty cash is money spent and later you can't remember where it went. Maybe it's that extra $5 you write into the check to buy groceries, or the refund money you get when you use coupons or turn in bottles.

Is it important to keep track of petty cash? That depends on your situation. If you're in a fairly tight situation, then you may think it important, even necessary, to keep track of every dollar or even every penny. This way you have more control of your spending.

One caution: remember something that's "petty" one day can add up to quite a sum of money if that petty expense is a regular cash outlay for you. For example, if you have two soft drinks per day out of a vending machine, you'll be spending more than $200 over the course of a year.

If you decide to keep track, try using a small notebook you can carry with you. Then, as soon as possible record your petty cash expenditures. Or write down amounts on slips of paper such as receipts.

You may or may not decide to itemize your petty cash income and expenditures in your accounting system. Again, that depends on your situation and you. One category headed "petty cash" may be all of the detail you need.

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