Page 236 - Account 10

Solution:
Code No. Particulars L.F. B. H. No. Debit Credit
Dr. B.E. Salary 21111 2,50,000
Cr. Personnel Provident Fund 25,000
Cr. Citizen Investment Fund 5,000
Cr. Income Tax/Social Security Tax 2,000
Cr. Employees’ Loan 6,000
Cr. Treasury Single Account (TSA) 2,12,000
(Being salary paid to the staff after the
necessary deductions.)
2,50,000 2,50,000
While depositing the deductions in the respective accounts:

Code No. Particulars L.F. B. H. No. Debit Credit
Dr. Personnel Provident Fund 25,000
Dr. Citizen Investment Fund 5,000
Dr. Income Tax/Social Security Tax 2,000
Dr. Employees’ Loan 6,000
Cr. Treasury Single Account (TSA) 38,000
(Being deducted amount is deposited into
concern account.)
38,000 38,000
C. Petty Cash Fund
In every office, there are a number of expenditures of the large and very small value.
It becomes inconvenient and impracticable to issue cheque for very small amounts for
the payment of expenses. In order to facilitate such small payment, a small fund of cash
is raised in periodic way like weekly, fortnight, monthly etc. in almost all the offices.
Such a fund is known as petty cash fund. It is created under the responsibility of a certain
person, called petty cashier. It is created in the beginning of the current fiscal year for a
certain period, say a week fortnight, month etc. and reimbursed in the beginning of the
second period and this process goes onward during the whole year. At the close of the
current year i.e. end of the last period, it is also closed and the amount is sent to the bank.
The petty cash fund is again raised in the beginning of the coming year and accordingly,
this goes onward. The accounting treatment for the raising of petty cash fund and its
reimbursement is discussed below. The amount paid by Petty cashier is recorded in the
payment voucher and should be verified by authorised person.
According to ‘Financial Administration Rules 2065’, central level office has made the
provision of creating petty cash fund upto Rs. 5,000 to Rs. 20,000 after the implementation
of Treasury Single Account (TSA) in petty cash fund. Petty cash book has been designed
under the format of AGF No. 22. Petty cash fund is closed at the fiscal year by depositing
remaining cash into Bank before final closing.

236 Aakar’s Office Practice and Accountancy - 10 Journal Voucher 237