Glossary: Petty Cash
Petty cash is a handy item to have for small purchases, but it needs to be accounted for correctly. Do a one-time entry in your books to set up the petty cash account. If you want $300 in the account, credit the bank account you are taking the cash from, and debit your petty cash account. Then put that petty cash in a box. Every time you take some out to spend, keep track of what you've taken out, with a receipt, and at the end of the month you'll have a list.