Recording petty cash

@carmen_ho, I think @Abeiku has it mostly right. But I want to add two points:

  1. Expense claims are to be used when someone pays for company expenses from personal funds. Examples are when an administrative assistant stops at the office supply store, sees the new electric stapler that has not been available, and buys it with her own money. She gives it to the business and files an expense claim for reimbursement. Your driver could do the same thing for the extra 100 in @Abeiku’s example, but then you have more transactions, because you would have to reimburse him separately. @Abeiku’s approach is equivalent to an undocumented, short-term loan from the driver to the business.

  2. If this is a regular event, you should consider an imprest fund. See this discussion: Balance or reconciliation of petty cash account - #4 by sam. The imprest fund amount should be adjusted so your driver never has to reach into his own pocket.