PETTY CASH BOOK

A petty cash book is a cash book used for recording small or minor expenses of the business. Petty means small, the minor expenses may include postage stamp, carriage, telegram, stationary, telephone, envelopes etc.

To establish the petty cash an amount called cash float is disbursted to the petty cashier in the beginning of a month, the cash floor is credited to the main cash book while the petty cash book is debited.

The keeping of the petty cash book is the responsibility of the petty cashier who is supervised by the main cashier. The petty cashier is re – imbused in the beginning of an other month to make up the cash float.

The Need for keeping Petty Cash Book are:

  • The time wasted posting the minor expenses to the ledger is saved
  • Petty cash book reduces the burden of the major cash book

Differences between cash book and petty cash book

Cash book Petty cash book
It has many sources of receipt It has only one source which is cheque drawn from the bank
It records the major items of cash transactions It records the minor items of transaction

Form of a petty cash book

Receipt F Date Voucher No Total expenses Traveling expenses Portage stamp Statio-

nery

Carriage Telegram

Example:

Enter the following into the petty cash book showing the analysis column for postage, travelling expenses, stationery, carriage and sundry expenses.

May 1              Petty cash in hand                               2,000

May 3              Paid for postage stamp                       150

May 5              Paid for travelling expenses                700

May 6              paid for stationery                              500

May 10            Paid for carriage                                 100

May 20            Paid for sundry expenses                    100

May 22            Paid for stationary                              200

Petty Cash Book

Receipt F Date Details Voucher Total expenses Postage stamp Trade expenses Stationary

 

Cornea Sundry expense
 

 

 

 

 

 

 

 

 

 

 

 

2,000

250

C.B May 1

May 3

 

May 5

 

May 6

May 10

May 20

 

May 22

 

May 25

 

June 1

 

Postage stamp

Travelling expense

Stationery

Carnage

Sundry expenses

Stationary

 

Balance

 

Balance b/d

 

1

 

2

 

3

4

5

 

6

 

 

150

 

700

 

500

100

100

 

200

1,750

250

2,000

 

 

 

150

 

 

 

 

 

 

 

 

150

 

 

 

 

 

700

 

 

 

 

 

 

700

 

 

 

 

500

 

 

 

 

200

700

 

 

 

 

 

100

 

 

 

 

100

 

 

 

 

 

 

100

 

 

 

100

Class Work

Enter the following transaction into a petty cash book with these headings. Postage and stationery, travelling expenses, carriage, office expenses.

 

Jan 1                Petty cash in hand                               3000

Jan 2                Bought stamp                                      500

Jan 4                Travelling expenses                             300

Jan 8                Bought stamp                                      200

Jan 10              Paid carriage                                       100

Jan 12              Repairs of office equipment               500

Jan 15              Bought envelope                                 150

Jan 25              Paid office cleaner                              200

See also

LEDGER ENTRIEES

BOOK – KEEPING ETHICS

15 Places to WIN $10,000
15 Places to WIN $10,000 Cash

SHOPPING TIPS

CONSUMER RIGHT

APPLIED KEYBOARDING

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