Besides maintaining a main or general cash book, many companies also maintain a small cash book known as petty cash book to record small day to day . Here we discuss the format of Petty Cash Book, Types of Petty Cash Systems including the Ordinary and Imprest System along with its advantages and. The maintenance of a small cash balance to meet these petty payments. The Imprest System is used for petty cash book maintenance. For example, On June 1 .
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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. Definition. The book in which those small payments are recorded, which are not convenient to record in main Cash Book, is called petty cash. In most cases, the petty cash book is an actual ledger book, rather than a computer record. Thus Sample Petty Cash Book (Running Balance).
Indicate how money allocated for small expenses was used and how it affected the profit margins. Petty cash accounting systems a. Open system In this system, the chief cashier provides the petty cashier with a fixed amount of money to cater for emerging small expenses.
The petty cashier receives some more cash from the principal cashier once the cash provided is exhausted. Fixed advance system The petty cashier receives a set amount of money to cater for all small expenses in a fixed period.
As its name suggests, no replenishment is made before termination of the period even if all the amount is used up legitimately. Imprest system Total petty expenses advance to the chief cashier ahead of time before disbursement.
The amount projected in the budget is then proceeded to the petty cashier on fixed terms to use for a specified period. This system is dominant in different workplaces.
Petty Cash Book sample The Petty Cash Book format provided below is crucial in highlighting the running balances to help the petty cashier regulate various allocations. In our case, the running balance is KShs.
The Petty Cash Book accurately reconciles because the amount available in the operating balance coupled with the recorded costs totals to the opening balance. This book complements the Main Cash Book, therefore, promoting financial accountability and transparency.
Simple Petty Cash Book is just like the main cash book. Cash received by the petty cashier is recorded on debit side and all payments for petty expenses are recorded on credit side in one column.
It is the most advantageous method of recording petty cash payments. When petty expense is recorded in total payment column, the same amount is recorded in the relevant petty expense column. Record the following transactions in an analytical petty cash book for the month of January Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.
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Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the day-to-day normal expenditures of the business which is not related to the direct line of the business. Petty Cash Book is an accounting book used for recording expenses which are of small and of little value. The person who is responsible for the recording the receipts and the payments of petty cash book amount is known as the petty cashier. In the company, the petty cash book is usually maintained by the administrative department of the company as the accounts departments are usually occupied by the larger business transactions and also the admin department is only responsible for such kind of expenses.
Under this Petty Cash book system,, a lump sum amount of cash money is given to the petty cashier. The cashier is responsible to keep a record of all the expenses for the review of the head cashier and present it before requesting for new funds to run the day to day expenditure again.
Under the Imprest Petty Cash System, the petty cashier amount is fixed for a given time period under which is usually under a month or a week. Under this time period, the cashier has to run the petty cash account under the given budget.
At the end of the period, the cashier submits the report and the amount spent by him is reimbursed so that the amount becomes equal to the beginning balance at the starting of the previous month. In case the expenditure exceeds the amount furnished a special request stating the requirement needs to be raised to the head cashier in replenishing the funds for a given time.
Imprest Petty Cash System has been widely adopted by the companies to run their petty cash account.