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
SHOPPING TIPS
CONSUMER RIGHT
APPLIED KEYBOARDING