How to use petty cash book
Petty cash book — AccountingToolsBesides 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 expenditures of the business. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal labor etc. These small expenditures are usually paid using coins and currency notes rather than checks. The person responsible for spending petty cash and recording it in a petty cash book is known as petty cashier. He, therefore, usually delegates the responsibility for handling small day to day cash transactions to a bookkeeper, receptionist or some other reliable staff member.
The Petty Cash Book
Petty cash book
Petty cash book is a type of Cash Book , which use to record small amount of receipts and payment. Cash includes currency and coins, although most businesses do not keep much of this type of cash around. Also included as a part of cash are the balances kept at banking and financial institutions. These balances include savings and checking accounts. It is most common to find with large commercial businesses that all receipts and payments are made through bank. Since expenses like conveyance, carriage, postage, telegrams, traveling etc, cannot be made by means of checks.
A petty cash book doesn't have to be high tech to provide the information you need. Petty cash is a system that funds and tracks small purchases such as parking meter fees that aren't suitable for check or credit card payments. A petty cash book is a ledger kept with the petty cash fund to record amounts that are added to or subtracted from its balance. Petty cash should be part of an overall business accounting system that documents how your business moves funds between one account and another and how it spends its money. Your petty cash book allows you to record relevant information about the purchases you have made.
By Tejswini Bhosale Leave a Comment. Petty Cash Book is the accounting book that is used for the purpose of recording the petty cash expenditure i. 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.
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. This type of book is maintained just like a cash book.
If you have a petty cash account and keep track of your transactions out of that account, it becomes easier for you to track tax-deductible expenses , journal entries you should make, and separate personal expenses from business expenses. Petty cash is a small amount of cash kept on hand to cover expenses that are too small to bother writing a check. A petty cash voucher or receipt is typically filled out with information on each transaction so that it can be entered into the company's accounting system and included in the company's financial statement information. Here are five easy steps and two tips you should take to set up a petty cash account for your small business. If you have a larger SMB, you may want to set up petty cash accounts for each of your divisions.
The petty cash book is a formal summarization of petty cash expenditures, sorted by date. In most cases, the petty cash book is an actual ledger book, rather than a computer record. 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. These credits can be for such transactions as payments for meals, flowers, office supplies, stamps, and so forth.