The most common accountancy approach used to manage petty cash is the ‘imprest’ system. This involves an employee being given the role of ‘custodian’ and made responsible for managing the petty cash. The cash is usually kept in a money box within the office.

Why petty cash book is maintained?

Petty Cash Book is maintained to record small expenses such as postage, stationery, telegram. The difference between the total of the debit items and that of the ‘total column’ on the credit represents the balance of the petty cash in hand.

Who manages petty cash?

petty cash custodian
Typically, one employee is responsible for controlling petty cash funds. This person is known as the petty cash custodian. The custodian will maintain and document all expenses from the petty cash. By giving this responsibility to one custodian, it means that you will retain internal control over the money.

Who maintains the petty cash book?

petty cashier
A petty cashier is a person who is appointed or who is authorized to make payments of petty cash expenses and record them in the petty cash book.

What are types of petty cash?

Petty cash book is of two types:

• Columnar petty cash book, and.
• Imprest petty cash book.

  How to set up a petty cash management system

  1. Appoint someone as petty cash custodian. Only one person at a time should be given responsible for the fund.
  2. Fund the account.
  3. Secure the funds.
  4. Establish policies.
  5. Record disbursements.
  6. Require receipts.
  7. Replenish funds when low.
  8. Monitor spending.

  What is a petty cash book Why is it maintained?

  A petty cash book is created to facilitate small payments in a business or organization. It caters for items such as postage and stamps, bus fare and stationery. It is meant to meet the day-to-day expenses and is entrusted in the hands of a petty cashier.

  Who maintain the petty cash book?

  How is a petty cash book set up?

  A petty cash book is generally maintained on a columnar basis – a separate column being allotted for each type of expenditure. The is only one money column on the debit side and all sum received from time to time by the petty cashier from the chief cashier are entered in it.

  What are the advantages of the petty cash system?

  The main advantages of imprest system of petty cash are as follows: A s the petty cashier has to produce to the chief cashier the petty cash book for inspection, it acts as a healthy check on the petty cashier. As the petty cashier has to account for his expenses, before he can draw further sums, the petty cash book remains up to date.

  Who is responsible for spending the petty cash?

  The person responsible for spending petty cash and recording it in a petty cash book is known as petty cashier.

  How to account for petty cash in expense accounts?

  The total debit in the expense accounts will equal the credit of the petty cash account. For example, if you have $200 in petty cash receipts, you would then need to record that $200 in the appropriate expense accounts. If all the $200 were “office expenses]