How do I set up a petty cash journal to record out of pocket expenses and still show HST for claiming?
Hi Carol! Think of Petty Cash as just another bank account. You may already have an account called Cash on Hand. Out of pocket items can be entered as withdrawals from the cash account, recording the expense and HST like any other transaction. This cash account should be adjusted back to zero periodically either against Personal Advances if you are operating a sole proprietor or partnership, or against Shareholder Loans for Corporations.