Dear Wajid
Please note as everybody is saying a cash account can not be negative and as mentioned by Hareesh these expenses are not allowable under IT.
But I hope, still the big question is what is the solution for this?????
See, If it is once or twice a year then you can create an account with the name of Petty cashier as creditors and book the the transactions. But it is a routine then change the accounting style. Instead of treating it as petty cash under cash open an account with the name of petty cashier as imprest account under loan and advances and book all expenses in that. That way you can avoid having a negative balance in cash book and an employee can claim excess amount spent.
Hope, this will solve the issue.
Regards
Charanjit
CAclubindia
