Petty cash books

Petty cash book – A petty cash book is used to record low values cash payments. It is a book of prime entry and also
a ledger account

Float is the amount given to petty cahier from which small cash payments are made.

Imprest system-the Imprest system of petty cash is where the amount spent each period is restored so that the
petty cashier starts each period with the same amount.

Analysis columns are used to divide the payments into different categories. The totals of the analysis column are
posted to the appropriate nominal ledger accounts at the end of each period. Any payments to credit suppliers are
posted to the appropriate nominal ledger accounts at the end of each period.

Petty cash voucher is a document prepared by an employee who wants to take money out from the petty cash. It
shows the purpose for which money is required, the date and signature of the person receiving the cash. The petty
cashier should check these vouchers against total cash spent at regular interval.

Advantages of using a petty cash book-

1. Smaller amount transactions are recorded in the petty cash. So the cash book has fewer transactions to
record which reduces the possibilities of mistakes in the cash book.
2. The chief cashier can delegate the responsibility of petty cash to junior staff. So he can focus on more
important tasks of the organisation.
3. Maintaining petty cash is good training for junior staff who can take on more responsibilities in the future.
4. The analysis column in the petty cash provides instant total to be transferred in the ledger accounts at the
end of each month.

Petty cash book

Date Details Total Date Details Total Cleaning Stationery Travel Ledger
Received Paid expenses account
Jan 1 Cash 4000 Jan 5 Cleaning 1000 1000
10 Stationery 1000 1000
15 Travel 500 500
expense
Cleaning 1000 1000
Jan c/d 500
31
4000 4000 2000 1000 500
Feb b/d 500
1
Cash/ bank 3500

Page no- 59, Question no- 4

Robin
Petty cash book
Date Details Total Date Details Total Cleaning Milk, tea Stationery
Receiv Paid and sugar
ed

May 1 Balance b/d 100 May 1 Milk, tea and sugar 5.20 5.20
6 Postage stamps 10.50 10.50
14 Cleaner’s wages 30 30
17 Envelops 7.40 7.40
21 Parcel postage 2.90 2.90
 24 Milk and tea 3.10 3.10
28 Cleaner’s wages 30 30
30 Computer paper 4.70 4.70
93.8 60 8.30 25.5
30 Cash/bank 93.8 30 Balance c/d 100
193.8 193.8
June 1 Balance b/d 100

Page no- 60 question =6

Shilpa
Petty cash book
Date Details Total Date Details Total cleani Refres Motor Ledger
Receiv Paid ng hment expense account
ed
Feb 21 Balance b/d 50 Feb 26 Window cleaner 7 7
26 Petrol 11 11
27 Refreshment 5 5
27 Gandhi stores 12 12
Total 35 7 5 11 12
28 Bank 35 28 Balance c/d 50
85 85
June 1 Balance b/d 50

Page no- 60, Question no- 6

Shilpa
a) Petty cash book
Date Details Total Date Details Total Cleaning Office Travelling Ledger
Receive Paid expenses expenses/
d motor
expense
Feb 21 Balance bd 50 Feb Window cleaner 7 7
26
Petrol 11 11
 Refreshment 5 5
Gandhi store 12 12
Feb Balance cd 15
29
50 50 7 5 11 12

March Balance bd 15
1
Bank 35

b) Cash book (bank column)

Date Details $ Date Details $
Feb 21 Balance bd 3120 Feb 22 South west traders 721
24 Jan path traders 410 26 Speedy motors 85
AB trading 220 29 Petty cash 35
29 Balance cd 2909
3750 3750
March Balance bd 2909
1