I recently started my own virtual bookkeeping business as a QuickBooks Pro Advisor and am trying to wrap my head around a new clients account.
They are wanting a lot of help balancing out their petty cash. They are a nonprofit and want to be sure everything is done properly. I understand how to withdraw money from a bank account to replenish the petty cash on hand. I understand how to record an expense when cash is paid to a vendor. However, I have never dealt with nor seen an ATM CASH deposited and then recorded as received in the Petty cash account. Because of this, they have a large negative (credit) balance for their petty cash account.
Was this done properly by the previous person handling their account? If it were me, I would have deposited the cash into their bank account to keep their cash on hand the "alotted" amount.
How can I balance this out so they have a debit amount again (actual cash on hand)? Should I have them make a large withdrawal to create a debit in the petty cash account rather than the credit it currently has?
