Can I set up a separate account for Petty Cash and record all the various purchases using the receipts?

Hello there, @info-loughwellfa. 

Thanks for taking the time to visit the Community. I'll share some steps to ensure you're able to set up the petty cash account with a starting balance. I suggest going to the Chart of Accounts page. From there, you'll have the option to create a new account which will be named Petty Cash by clicking the New button.

Here's how:

1. Go to the Gear icon ⚙ and select Chart of Accounts.
2. Click the New button.
3. From the Account Type drop-down, choose Bank.
4. In the Detail Type drop-down arrow, choose Cash on hand.
5. Enter Petty Cash for the account name.
6. The opening balance will be created when you move money from the checking account by writing a check or transferring funds. If you already have money to use for petty cash, enter the amount in the Balance field and choose the as of date.
7. Fill in the other necessary field.
8. Hit Save and Close. 

For additional information, you can refer to this article: Set up and use petty cash. This also provides details on how to manage petty cash in QuickBooks Online.

I'm adding this article to further guide you in effectively managing your business using QBO: Help guide for QuickBooks Online. It contains topics about advanced accounting, banking, and payments to name a few.

Let me know in the comments below if you have other concerns about your petty cash account and managing its transactions in QBO. I'm just around to help. Take care always.

Thank you very much for your answer---I already have the Cash in hand (taken out of last year's accounts) so I don't need to withdraw from the bank---what do I do in that situation?

Thanks for getting back to us, @info-loughwellfa. Allow me to chime in and share some information about your accounts.

When you set up the Petty Cash account, you should enter the balance that so when you record the purchases it will not cause a negative balance on your account. If you haven't entered a balance, you can edit the petty cash account and input the amount from there.

Here's how:

1. Click the Gear icon (⚙) at the top.
2. Select Chart of Accounts.
3. Locate the Petty Cash account and hit the drop-down ▼ menu.
4. Choose Edit.
5. In the Balance, column enters the amount and its date.
6. Pick Save and close once finished.

For more details about deleting or editing accounts, I've included some articles for additional reference: 

• How to manage default and special accounts in the Chart of Accounts 
• Remove deleted accounts from reports 

I've collected these articles that will help you manage your accounts in QuickBooks:

• Learn about the chart of accounts in QuickBooks
• Create subaccounts in your chart of accounts in QuickBooks Online
• Learn common accounting terms

Tag me along if you still have questions. I'll be happy to answer them for you. Have a great day ahead, @info-loughwellfa.