Entry for Petty Cash

First tell use how you set it up.

(1) The PC account was set up by writing a check from the company chkg account to a "bank" account set up in John Doe's name -- "Petty Cash - John Doe." That account then had a beg bal of $100. (2) Receipts for $80 were entered in the PC - John Doe register and applied to the appropriate expense accounts. (3) Typically, in our film production industry, the remaining bal of $20 is returned by John Doe writing a personal check to the production company. That check gives the company a document that is then deposited back into the company's main checking account, the same account used to set up the PC account for John Doe in the beginning.

So my question is...when John Doe gives a personal check to the company for $20, what account needs to be set up to record that deposit (by doing Activities / Make Deposit)? During the "Make Deposit" process, do I set up an account for "John Doe," and if so, is that account a "bank" account, a "current asset" account, an "other asset" account, or some other type of account?

Basically, John Doe wrote a personal check to the company for $20. I'm trying to get it back into the company checking account, and leave the PC account with a zero balance.

Thank you for you help.

Set up a current asset account or currect liability account called "Exchange". Enter a disbursement from the John Doe checking account for $20 and post to the Exchange account. Enter the receipt of the $20.00 from John into you regular checking account and code to the same exchage account. The balance in the exchange account will end up with a zero balance.

I thought I had it, then realized you lost me somewhere in the process. Can you contact me via email? I'm trying to figure this out as fast as I can. snipped-for-privacy@hotmail.com.

Thanks,

Here's the problem in following your direction:

(1) There is no John Doe checking account to enter a disbursement from. We're not sure what JD Chkg acct you're referring to, or how/why it came into existence. John Doe would never have a checking account on the company books; John is an employee of the company and was spending money out of a Petty Cash account set up for him.

(2) Entering the reciept of $20 into the company checking account, resulting in a zero balance in an Exchange" account is not the result we need. While we indeed need to receive the $20 into the company checking account, receiving that $20 needs to result in a zero balance in the "Petty Cash - John Doe" account.

Here's what we did that seemed to work:

(1) From the register for "Petty Cash - John Doe," we entered a $20 payment and posted it to the Company Checking account. There was no Payee entered, but the Memo read "Return unused cash."

(2) The result was a credit to "Petty Cash - John Doe," and a debit to "Company Checking," which zeroed-out the Petty Cash - John Doe account.

I'd like to hear from anyone who can offer a clear list of "do this" in case we got it wrong.

Thank you.

Your method will work as well.