Vouching of petty cash book

Points to be considered while vouching of cash transactions. Payments other than petty payments should be done through crossed cheques. To expedite the purchase of low value items, administrative staff are authorized to maintain a petty cash fund. We shall now discuss the vouching of items, which appear in the debit side of the cash book briefly as below. Such disbursements are a common problem in petty cash, where there is a high risk of fraud. Before setting the program of vouching, an auditor should inquire carefully into whole system of internal control. In a business concern, cash book is maintained to account for receipts and payments of cash. Vouching of cash transactions points to be considered. Points to be considered while vouching of cash transactions vouching of cash transaction is the most important job of an auditor. Vouching of receipt side or debit side of cash book. Definition of petty cash voucher a petty cash voucher is usually a small form that is used to document a disbursement payment from a petty cash fund. This system ensures maintenance of petty cash book regularly and up to date.

Before commencing the work of vouching cash book, the auditor should. Opening balance of cash book represents cash in hand at the start of the year and should verified from the balance sheet of last financial year. It is a physically small form, since it must fit within the petty cash box or drawer. Errors and frauds arise mostly in connection with receipts and payments of cash by making misappropriations wherever possible. Actual cash in hand with the petty cashier plus the total vouchers for payments made since the date of last reimbursement shall not exceed, at any time, the amount of the imprest. The receipt side or the debit side of the cash book contains items such as opening balance, cash sales, receipts from debtors, receipts from bills discounted and bills matured, income from investments, sale of investments, sale of fixed assets, loan received, and miscellaneous receipts, etc. Errors and frauds arise mostly in connection with receipts and payments of cash by. Also, count the value of postage stamps or negotiable instruments like travelers checks or bonds stored with the petty cash. Have been sanctioned by a person holding some authority, iv. Have been properly recorded in the books of accounts.

Vouching of the payment side of cashbook cheque payments. Auditing vouching of cash transactions we will discuss the cash receipt which are placed on the. The auditor should ascertain that the system of petty cash is maintained on the imp rest system and note the amount of imp rest should be consistent and in line with the requirements of the company although it should not necessarily be rigid. Auditing vouching of cash transactions tutorialspoint. Auditor should check the petty cash in hand and verify the balance of petty cash with cash book. First of all, the opening balance on the debit side of the cash book should be compared with the balance shown in the last audited balance sheet to ensure that actual balance has been brought down voucher to be vouched last audited balance sheet. Vouching of ledger books petty cash book purchase book purchase return book. Cashbook cash payment transactions credit side or payment side of the cash book auditor should satisfy himself that the payment have been actually made.

Also, since most petty cash custodians are not trained as accountants, they may incorrectly record disbursements. Before starting the vouching of cash book, the auditor should enquire about the internal check system in. The voucher is typically purchased from an office supply store. In the companys cash book, the auditor identifies entries of cash sales, receipts from creditors, interest income, dividend income, mortgage payments, fixed asset sales and accounts receivable. Possibilities of cash defalcations will also be kept limited to the extent of the amount. What is the object of vouching the cash book or how the. If there is a petty cash book, the custodian enters the amount of the cash received in the book, and updates the running total of cash on hand. If these are paid through bank then pass book should be checked. The auditor should examine these bills with the returned.