The cash book that records payments of small expenses of small denomination such as postage, stationery, conveyance, etc. This cash book is maintained by a cashier called Petty Cashier and is known as Petty Cash Book.

How is petty cash accounted for?

The initial petty cash journal entry is a debit to the petty cash account and a credit to the cash account. The petty cash custodian then disburses petty cash from the fund in exchange for receipts related to whatever the expenditure may be. The cashier creates a journal entry to record the petty cash receipts.

What is petty cash book used for?

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.

What is petty cash book How is it prepared?

How it is prepared? Petty Cash is prepared just like a simple cash book having the debit and credit sides. Amount received from the head cashier is recorded on the debit side, whereas the payments are recorded on the credit side. Petty Cash Book is prepared to make a record of petty expenses.

Who prepares petty cash book?

petty cashier
To avoid a large number of small payments, a separate cash book is made which is maintained by a petty cashier, who is paid a small amount at the beginning of the period called impress amount. When petty cashier spend the money, he is reimbursed the same amount to make further small expenditure.

What is the purpose of a petty cash book?

What is Petty Cash Book? Petty Cash Book is an accounting book used for recording expenses which are small and of little value, for example, stamps, postage and handling, stationery, carriage, daily wages, etc. These are expenses which are incurred day after day; usually, petty expenses are large in quantity but insignificant in value.

What are the two types of petty cash?

Thus, the book is part of a manual record-keeping system. There are two primary types of entries in the petty cash book, which are a debit to record cash received by the petty cash clerk (usually in a single block of cash at infrequent intervals), and a large number of credits to reflect cash withdrawals from the petty cash fund.

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.

How is a debit balance recorded in a petty cash book?

This balance is always a debit balance. Therefore the primary book wherein the money received from the head cashier and the amount of expenditure for a particular period of an organization are recorded in chronological order of dates in separate money columns of both sides, is called columnar petty cash book.