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Travel Advance Account and Petty Cash Account (APS 010)

FPP A.044

Financial Reporting Treatment Example

Introduction

Establishing or increasing a petty cash account does not decrease an agency’s operating appropriations. Those actions will decrease the fund cash balance in the fund that was used to create the petty cash account and post the applicable accounting event for generally accepted accounting principles (GAAP) financial reporting.

The financial statement impact is illustrated is the charts below.

Balance Sheet Impact

GL Account Title Debit Credit
Imprest, Travel Advances, Petty Cash Accounts X  
Cash in Treasury   X

Income Statement Impact for Appropriated Fund 0001

GL Account Title Debit Credit
Legislative Appropriation X  
Legislative Revenue   X

Note: There is no income statement impact for any other appropriated funds.

Example Setup

Assume the following conditions apply to the state agency in this section’s example.

The example agency has:

  • $10,500 authorized petty cash in appropriation 94992 ($10,000 of this is held in a local bank account and $500 is in a lock box at the agency).
  • A bank statement showing $9,000 as the bank balance.
  • $1,000 in outstanding reimbursements to employees.

Financial Reporting Treatment Process

The financial reporting treatment of the example is illustrated in this chart:

Stage Description
1 For the AFR and USAS, $500 should be reflected in GL 0020 – petty cash on hand.
2 For the AFR and USAS, $10,000 should be reflected in GL 0042 – petty cash in bank on the balance sheet.
3 In the deposit and investment note, the carrying amount will be $10,000. The bank balance will be $9,000 and should be provided.
4 The $1,000 of unreimbursed expenditures should be monitored in a subsidiary petty cash ledger. Outstanding reimbursements should not be reported as accounts receivable in USAS.
5 The $10,500 amount authorized in this example should be confirmed to the Comptroller’s office as required by its policy for USAS Balances for Imprest, Petty Cash and Travel Advance Accounts (FPP A.045). The corresponding Aug. 31 amount is the amount reported in the State of Texas Annual Cash Report.