The source document that approves petty cash disbursements is typically a petty cash voucher or receipt, which records the amount disbursed and the purpose of the expense. This document must be authorized by a designated official or manager to ensure proper control and accountability of funds. Maintaining accurate and approved petty cash vouchers helps prevent misuse and supports accurate financial reporting.
Introduction to Petty Cash Disbursement
Petty cash disbursements manage small, incidental expenses within an organization. Proper authorization ensures transparency and control over these minor payments.
- Petty Cash Voucher - This source document records and approves each petty cash disbursement.
- Authorization Signature - A supervisor's or manager's signature validates the petty cash voucher for expense approval.
- Receipt Attachment - Supporting receipts accompany the voucher to confirm the nature and amount of the expenditure.
Petty cash vouchers serve as the primary source document to approve and track petty cash disbursements effectively.
Importance of Source Documents in Petty Cash Management
Source documents are essential in approving petty cash disbursements as they provide verified evidence for every transaction. These documents ensure accuracy and accountability in petty cash management.
- Petty Cash Vouchers - Official forms signed by authorized personnel to approve and document each expense.
- Receipts - Proof of payment supporting the exact use of petty cash funds for specific purchases or expenses.
- Authorization Signatures - Required approvals on source documents to validate that disbursements comply with company policies.
Types of Source Documents for Petty Cash Authorization
Petty cash disbursements require approval through specific source documents to ensure proper authorization and accountability. Common types of source documents include petty cash vouchers, invoice receipts, and reimbursement forms, each providing detailed evidence of the expenditure. You can rely on these documents to maintain accurate records and prevent unauthorized usage of petty cash funds.
Petty Cash Voucher: Definition and Components
| Source Document | Petty Cash Voucher |
|---|---|
| Definition | A Petty Cash Voucher is an internal document used to authorize and record payments made from the petty cash fund. It serves as proof of expenditure for small, incidental expenses and ensures accountability in petty cash disbursements. |
| Purpose | To approve, document, and track petty cash disbursements in a controlled and organized manner. |
| Key Components |
|
| Function in Authorization | The petty cash voucher acts as the official authorization document. Only petty cash disbursements accompanied by a properly completed voucher with necessary approvals are valid and recorded in the accounting system. |
Receipts and Invoices as Supporting Documents
Petty cash disbursements are approved based on source documents that provide evidence of the transaction. Receipts serve as the primary supporting documents, detailing the amount spent and the purpose of the expenditure. Invoices from suppliers or service providers also validate the disbursement by outlining the goods or services purchased.
Authorization Signatures and Approval Process
Authorization signatures serve as a critical control in approving petty cash disbursements, ensuring all transactions are verified by responsible personnel. The source document that approves these disbursements typically includes an authorized voucher or petty cash slip signed by a designated approver.
- Authorization Signatures - These signatures confirm that the petty cash disbursement complies with company policies and is approved by the responsible manager or supervisor.
- Approval Process - The petty cash voucher requires a documented signature from a designated authority before funds are released, creating a clear audit trail.
- Source Document - The petty cash voucher or request form acts as the official source document, containing the authorization signatures that validate the disbursement.
Documentation Requirements for Petty Cash Reimbursement
What source document approves petty cash disbursements? The petty cash voucher serves as the primary source document authorizing these disbursements. Proper documentation, including receipts and approval signatures, is required for petty cash reimbursement to ensure accountability and accurate record-keeping.
Record-Keeping Standards for Petty Cash Transactions
The source document that approves petty cash disbursements is typically a petty cash voucher or petty cash receipt. This document records the details of the cash transaction, including the amount, date, purpose, and approval signature.
Record-keeping standards for petty cash transactions require maintaining organized and accurate documentation. Proper approval and detailed vouchers ensure accountability, audit trails, and compliance with internal financial controls.
Internal Controls and Audit Trail for Petty Cash
The source document that approves petty cash disbursements is typically the petty cash voucher or petty cash slip. This document records the details of each transaction and requires authorized signatures to validate the expense.
Internal controls for petty cash ensure all disbursements are properly approved and supported by original receipts. Maintaining an audit trail through these vouchers helps prevent misuse and facilitates accurate financial audits.
What Source Document Approves Petty Cash Disbursements? Infographic
