There are two primary types of entries in the petty cash book, which are a debit to record cash received. It is an accessible, convenient way to pay for small purchases. In big business firms, all payments are made by cheques and all receipts are banked. Once you have the basics covered, you need to put money into petty cash. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal. There might be a petty cash drawer or box in each department for. The petty cash book is a recordation of petty cash expenditures, sorted by date.
Petty cash book is the accounting book that is used for the purpose of recording the petty cash expenditure i. The petty cash book is ruled in the form of the single column cash book with an amount column and addition oat columns for the more usual classes of expenditure. Petty cash book is an accounting book used for recording expenses which are small and of little value, for example, stamps, postage and handling, stationery, carriage, daily wages, etc these are expenses which are incurred day after day. Petty cash book format example definition explanation. The petty cash book is a formal summarization of petty cash expenditures, sorted by date. Totals are carried forward from page to page until the end of the periods. Place the current date on the date line of the check. Petty cash definition and meaning collins english dictionary. Sentrysafe cb12 cash box with money tray and key lock 0. Each entry in the petty cash book should include the date, the amount, and what was purchased with the petty cash. It is another cash book which is maintained, generally, in large business concerns to reduce the burden of main cash book, in which numerous transactions. The first reference to such is in the times, june 1827 mr.
In most cases, the petty cash book is an actual ledger book. Petty cash is also the title of the general ledger current asset account that reports the amount of the companys petty cash. The additional analysis columns are used to analyze expenditures as they arise. Petty used to mean just petite or small, but now its used for things that are trivial and shouldnt matter much. Petty cash book is a ledger book, which is used to record petty cash expenses formally in chronological order, with the date. In most cases, the petty cash book is an actual ledger book, rather than a computer record.
The receipts are recorded in the dr side and the payments are recorded in the cr side of the cash book. Add guildhall white petty cash voucher pads 100 leaves pack of 5 1569 to basket. Petty cash book is maintained to record small expenses such as postage, stationery, telegram. Range of cash books, petty cash pads, receipt books and. Write out the dollar amount in words on the appropriate line of. Before the rise in the use of credit cards and charge cards, nearly all companies used petty cash accounts to allow employees responsible for purchasing small supplies to do so with minimal hassle. You should write a check to the custodian to initially establish the fund. There are numerous small payments on account of expenses like stationery, cartage, coolie hire, refreshments to guests etc. Petty cash book definition of petty cash book by the. Write out an analytical petty cash book from the following transactions.
How the imprest system of petty cash book works your. If you host world leaders and spend more time picking napkins than memorizing names, youre focused on petty things. Meaning of petty cash book a petty cash book is one in which all petty or small payments made through petty cash fund are recorded systematically. A petty cash book is an accounting book used for recording expenses which are small and of little value, for example stamps, postage and handling, stationery. Search for abbreviation meaning, word to abbreviate, or lists of abbreviations. A small fund of money for incidental expenses, as in an office. Petty cash or the petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check. Most cash should be deposited right away in the bank, but a small amount can be kept on hand in a petty cash account earmarked for minor.
Compile a cash book with cash and bank columns from the following transactions. You need to develop a set of policies or procedures dictating the handling of cash in your business to avoid problems such as theft and misappropriation. Review your petty cash register before you replenish the petty cash fund. Petty cash is an easy to understand and familiar method of paying for company expenses. Petty cash book definition the petty cash book is defined as relatively small amount of cash kept at hand for making quick payments for miscellaneous small expenses in the business concern. Petty cashier meaning in the cambridge english dictionary. Tom pettys 50 greatest songs his hits have defined rock radio since the seventies, and he never stopped writing great music.
Petty cash or a petty cash fund is a small amount of money available for paying small expenses without writing a check. The intent of this activity is to see if there have been any undocumented disbursements. In almost all businesses, it is found necessary to keep small sums of. Recording of transactions ii petty cash book solutions.
A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. Petty cash meaning in the cambridge english dictionary. Uses of petty cash book its a cash book used to enter daily petty expenses. Petty cash book is maintained by the petty cashier. Pack of 5 guildhall 127 x 102mm petty cash voucher pads in white 1569. The credit side consists of several analysis columns.
The check amount should be sufficient to handle most cash purchases for the time period you choose, but not so large as to encourage theft. Recording of transactions ii petty cash book solutions this page contains the cbse accountancy class 11 chapter recording of transactions ii notes. See here, the meanings of the word petty, as video and text. Petty cash book can be maintained either in a simple or in analytical way. Information and translations of petty cash in the most comprehensive dictionary definitions resource on the web. Furthermore, keep a microsoft excel doc or other spreadsheets that tracks who spent what, when it was spent, and the total amount of spending for both the. When a business doesnt provide access to company credit cards, or employees would rather not wait to be reimbursed for purchases, using petty cash is a simple alternative.
Guildhall account pad 8 summary column 298mm x 210mm 60 sheet punched 1589. Also, since most petty cash custodians are not trained as accountants, they may incorrectly record disbursements. A small amount of cash kept on hand by a business for incidental expenses. It should be used in conjunction with procedural information, resources, and forms, which outline the application of this policy and may be found on the petty cash administration section. Petty definition, of little or no importance or consequence. You can find the questionsanswerssolutions for the chapter 4 of cbse class 11 accountancy in this page. Meaning of petty cash book, its importance and advantages. Petty cash book definition, types, format, examples imprest and. Blount here read some items from the petty cash book. Petty cash book explanation, format, example, ordinary and imprest. So, the book, wherein day to day petty expenses for a particular period of a business concern, are recorded in chronological order of dates is called petty cash. Recording of transaction in cash book and journal with. The is only one money column on the debit side and all sum received from time to time by the petty cashier from the chief cashier are entered in it. Thus, the book is part of a manual recordkeeping system.