PETTY CASH BOOK

CONTENT

1. Meaning of Petty Cash Book
2. Columns in a Petty Cash Book
3. Recording of Receipts and Payments in Petty Cash Book
4. Preparation of a Petty Cash Book
5. Imprest System, Petty Cash, Reimbursement and Retirement

Meaning of Petty Cash Book

This is used to record small expenses such as postage stamps, envelops, transport fares, newspapers, stationery and other small items needed in the office. The word ‘petty’ means small. We cannot pay for them with cheques because they are too small. It is also a book of original entry and also a ledger account for petty cash. The cost of each of the small items is recorded in the petty cash book instead of the ledger. The total expenses are transferred to the ledger as a petty cash account.

Columns in a Petty Cash Book

DEBIT SIDE

1. Amount
2. Date
3. Particulars of expenses
4. Voucher number
5. Total amount

CREDIT SIDE

On the credit side we have the analysis of expenses of a ledger account.