Petty Cash Book

The petty cash book is a book of vouchers which are made each time an expense is made from petty cash (money). Always the voucher would show the amount, purpose, recipient, general ledger account number and date relating to the expenses. If person receiving the petty cash and the person giving out the petty cash would sign the voucher and any supporting certification (such as revenue) would be involved.

The petty cash book is normally maintained on a columned foundation - the separate column being allotted for each kind of outlay and is only 1 money column on the debit entry side and all sum got at times by the petty cashier from the chief bank clerk are entered in cash. Credit side consists of more analysis columns in the petty cash book.

The petty cash is a small amount of discretionary finances in the business firm of cash practiced for expenditure where it's not sensible to make the expense by check because of the trouble and price of cashing and writing singing cashing in the check of the bank.

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.


Uses of Petty Cash Book

It's a cash book used to enter daily petty expenses like cost of stationery, postage and Xerox copy and so on. The petty cash book will be maintained by a separate cashier known as petty cashier in the accounting field.

A petty cash is a cash book used to enter all small or petty expenses obtained. For example tea, Xerox copy etc.

The petty cash book is to enter how the cash available for daily expenses are spent for example milk, tea, taxi charges and postage.

Petty Cash Book Example

1. Enter the following transaction in the following columns. The cashier who was given Rs. 100 under imprest system on Aug 4, 1986.


Aug 6 Paid for printing work    5

Aug 8 Paid for stationary purchased    8

Aug 10 Paid for postage stamps    6

Aug 12 paid for office furniture    11

Aug 14 Paid for travelling charges    7

Aug 15 Paid for general expenses    4

Aug 17 Manager taxi fare    12


Petty Cash Book

2. Enter the following transactions in the simple petty cash book:


May 2 Cheque received for Rs. 700 to open the book.

May 3 Postage paid    Rs. 50.

May 6 Paid taxi hire of travelling salesman    Rs. 100.

May 8 Paid wages    Rs. 125.

May 13 Telegram sent to Delhi    Rs. 40.

May 17 Cart hire paid on commodities bought    Rs. 60.

May 19 Stationary purchased    Rs. 120.

May 25 Customer's tiffin charges    Rs. 60.

May 31 Settled the balance due to Smith    Rs.80.


Petty Cash Book Example

Next Chapters

Single Entry Accounting
Depreciation Dividends in Accounting
Double Entry Accounting
Cash Book
Discount Assets
Ledger in Accounting
Final Accounts
Liability Debenture
Journal Entry
National Income
Trial Balance Payroll Accounting
Drawings in Accounting
Petty Cash Book
International Trade Admission of a Partner
Book Keeping
Bill of Exchange  

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