Hello
We have taken £400 out of our bank as cash via a cheque. The money was used as the float for an event. Once the event finished the £400 plus the money we took from the event has been paid back into the bank. So out bank statement shows £400 coming out of the bank on one day and £500 being paid into the bank a few days later. We have created an invoice for the £500 and have tagged the £500 against it to deal with the £500 cash coming in. How do I account for the £400 please?
Any help greatly appreciated
Regards
Helen
Tag it to petty cash
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That doesn’t sound right - if you took £400 out as a float and paid a total of £500 back in then that means £100 of income, not £500.
You want to deal with cash just like it’s another bank account - when you withdraw £400 float that’s a transfer from your current account to your petty cash account. The petty cash account now has a balance of £400, which matches the cash you actually hold.
Then you went to the event and made £100 of sales - that’s a sales invoice for £100 that was paid into the petty cash account, leaving it with an overall balance of £500.
Then you paid that £500 into the bank - that’s another bank transfer, this time from petty cash to current account, and it’ll leave your petty cash account at zero.
The only actual income is the £100 of cash sales.
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