The petty cash book is the record of petty cash expenditures that are sorted by date. The petty cash amount contains a small amount of cash and is mainly used for purchases when using checks, debit cards or credit cards would be frivolous. This type of cash book is called an analytical petty cash book or simply petty cash book. Small petty cash recording receipt log book ledger with 5 column payment record, 4year ataglance calendar and. There are no petty s mall payments to be made every day. It is another cash book which is maintained, generally, in large business concerns to reduce the burden of main cash book, in which numerous transactions involving petty small amounts are recorded. Though you can make your own petty cash log template, learning about the different types can help you out immensely.
Simple cash book prepared like cash account in ledger. A cash book acts like both a journal and a ledger for cash transactions. Thus, it substitutes the creation of cash account, bank account, discount received and discount allowed in the ledger. Note the analysis columns that enable the transaction to be recorded and analysed at the same time, according to the type of expenditure incurred. Petty cash book is maintained to record small expenses such as postage, stationery, telegram. At the end of the month the petty cashier balances his petty cash book, and makes a summary of his disbursements, takes it, together with vouchers, to the cashier, who after checking them, draws a cheque for the months payment, which according to the petty cash book shown here amounts to 177. Download petty cash book excel template exceldatapro. Two types of petty cash book maintained by small or. Petty cash book definition, types, format, examples imprest and. Thus, the book is part of a manual recordkeeping system. Cash is a current asset which consists of items used in day to day financial transactions as medium of exchange.
This versatile petty cash book will suit most types of small business. For this purpose, a petty cashier is appointed by the firm, to pay for small payments usually below rs. Petty cash book is a kind of cash book which records large number of small payments such as conveyance, cartage, postage, telegrams and other expenses under the imprest system. What is the type of account and normal balance of petty cash. The accounting records will show the following bookkeeping entries when the business withdraws cash to set up a petty cash float. Cash includes currency and coins, although most businesses do not keep much of this type of cash around. Petty cashier is a person, who maintains the petty cash book. Petty cash book is a ledger book, which is used to record petty cash expenses formally in chronological order, with the date. We will look in detail at the entries that are made in the petty cash book in the next chapter.
Use your judgement, and put less into the petty cash fund than you think you needyou can always increase the amount later. Jan 24, 2021 a petty cash account is not a type of bank account but more of a fund maintained inside a business. To maintain internal controls, managers can use a petty cash receipt figure, which tracks the use of the cash and requires a signature from the manager. What is the type of account and normal balance of petty. 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. Petty cash book is a type of cash book, which use to record small amount of receipts and payment. Perfect for maintaining accurate business accounts and monitoring petty cash flow.
Single column, double column, three column and petty cash book. When you give cash to an employee or use petty cash yourself, record it with a slip of paper to track who, when, and what the money was used for. The format of simple petty cash book is as under ii. Petty cash financial accounting simple book production. Systems of petty cash fund notes, videos, qa and tests. Cash or cheque received from the head cashier is recorded in the column of amount received and petty expenses paid recorded in the column of amount paid. To track the cash, create a petty cash account in the asset section of your chart of accounts. Petty cash book explanation, format, example, ordinary and imprest. Petty cash book definition, types, format, examples. You may find out that certain types might apply to your business more effectively and so you can format your log the same way. Voucher is a form which shows what a payment is for. There are the two methods of preparing petty cash book i. Meaning, types and importance of petty cashbook srd law notes.
Cash book types of cash book subsidiary books tutors tips. The following types of forms are used for operating the petty cash fund. Petty cash book is used for recording payment of petty expenses, which are of smaller denominations like postage, stationery, conveyance, refreshment, etc. 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. All the cash receipts are entered in amount column on debit side and all cash payments are appeared on credit side of the amount column. In such a cash book there are preexisting columns for the usual expenses that recur quite frequently for an organization. A free powerpoint ppt presentation displayed as a flash slide show on id. There are basically two primary types of entries in the petty cash book. To maintain internal controls, managers can use a petty cash receipt, which tracks the use of the cash and requires a signature from the manager. These small expenditures are usually paid using coins and currency notes rather than checks. Nov 27, 2019 the petty cash fund, which originally contained the imprest fund of 100 in cash, now contains two petty cash vouchers for a total of 65, and the remaining cash held of 35.
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. Nov 04, 2015 any cash which the petty cashier receives is recorded on the debit receipt side and any cash which he pays out is recorded on the credit side of the cash column. Petty cash book type of account petty cash is an asset and is shown under the category of current assets in the balance sheet. These credits can be for such transactions as payments for meals, flowers, office supplies, stamps, and so forth. Scroll down to step 2 below for a completed example. Meaning, features, advantages, types and module 10 petty cash book 2. These balances include savings and checking accounts. According to the modern rules whenever there is an increase in the value of the asset then the particular asset account is being debited and viceversa. In most cases, this petty cash book is a ledger book, and not a computer record.
The petty cash book which is prepared in columnnor form is called anylatical petty. It is important to understand that at all times the total of the cash held plus the petty cash vouchers should equal the original imprest fund. Types of petty cash book in accounting books, petty. May 14, 2017 the initial petty cash journal entry is a debit to the petty cash account and a credit to the cash account. Simple petty cash book is divided into two sides, a receipt side and a payment side. The credit side consists of several analysis columns. When the account goes below a certain specified amount, the system is replenished. In most cases, the petty cash book is an actual ledger book, rather than a computer record. Ncert solutions for class 11 financial accounting recording. Whether you decide to make a petty cash form or an actual book, the steps would be the same and the outcome would result in how well you manage the whole system. Petty cash book explanation, format, example, ordinary. The only difference is that the payments side ruled into suitable column for recording expenses that are repetitive in nature. Prepare a blank petty cash log utilizing a small book or you can use this free pdf template.
Also included as a part of cash are the balances kept at banking and financial institutions. Columnar petty cash book, and imprest petty cash book. Petty cash book explanation, format, example, ordinary and. Meaning, types and importance of petty cashbook srd law. Aug 09, 2019 the business wants to establish a petty cash float of 300 using money withdrawn from its the bank account. When youre ready to replenish the fund, record the expenses in your accounting software based on the petty cash expense log. Since it is an asset, the normal balance of petty cash will show a positive balance or debit balance. The petty cash custodian then disburses petty cash from the fund in exchange for receipts related to whatever the expenditure may be. Petty cash is a small amount of money, but it adds up quickly as its replenished. There are two primary types of entries in the petty cash book. These are expenses which are incurred day after day.
A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. Knowing discount income and discount expense, the discount income, and discount expenses can easily be known from the total credit discount column and debit discount column of the treble column cash book. This type of cash book records transactions related to three different types of accounts, i. Have production personnel been issued with a standard excel spreadsheet that they are required to account for expenses on. In accounting and finance, cash includes, currency notes made of paper, coins, demand deposits, money orders, checks and bank overdrafts etc. Person who maintains petty cash book is known as petty cashier and these small expenses are termed as petty expenses. Petty cash book a petty cash book is shown on the next page. We will discuss the different genres of books under fiction and nonfiction categories. There are two primary types of entries in the petty cash book, which are a debit to. A simple petty cash book is one in which there is only one amount column on its both sides with common date and particular column. There are two primary types of entries in the petty cash. A petty cash fund is a type of imprest account, which means that it contains a fixed amount of cash that is replaced as it is spent in order to maintain a set balance. Define the purpose and use of a petty cash fund, and prepare. Jul 16, 2019 petty cash works on the imprest system, in which there is an initial amount of money put into an account, which is drawn upon for a specific purpose in this case, petty cash.
For this purpose, a petty cashier is appointed by the chief cashier. There are four major types of cash book that companies usually maintain to account for their cash flows. Gv commerce classesspecial purpose subsidiary books. Please note that it is totally possible for the same book to be categorized under many book genres. Information is extracted from these documents and entered chronologically, in full or summary form. In this book, separate columns are provided for usual head of expenditure. This book keeps the record of all cash payments and cash receipts. Define the purpose and use of a petty cash fund, and. Examples include receipt books, cheque butts, vouchers etc. This book is a part of the manual recordkeeping system in the accounting department. An analytical petty cash book has two sides is used for recording receipts of the cash and credit side is used for recording payments types of petty cash book.
Two types of petty cash book maintained by small or large companies for easy, quick and accurate recording of all cash transactions. Petty cash book format example definition explanation. Moreover, a cash book is a substitute for cash account in the ledger. Aug 18, 2016 to support our effors you can donate a small amount by following this link. Cah book mcqs 1 is a set of multiplechoice question related to all four types of cash book i. A company that properly maintains a cash book does not need to open a cash account in its ledger. Set up a petty cash float double entry bookkeeping. A petty cashier makes a detailed analysis of petty payments and records under suitable heads, i. What is a cash book definition, explanation and types. According to the modern rules whenever there is an increase in the value of the asset then the particular. Until reimbursement is made, the expenditures made through petty cash fund should not be posted in the bank cash book. Ppt petty cash book powerpoint presentation free to view. The cash can also be used to make change if there is not enough in the cash register.
Simple petty cash book in simple petty cash book there is one column each for recording of receipt of cash from the. Petty cash bookmeaning, advantages, format, example. Cash book types of cash book subsidiary books tutor. Types of pe tty cash book petty cash book is of two types. Mar 23, 2018 in cashbook, we will record the all cash transaction of the business. Petty cash book i meaning ii advantages iii system of petty cash book 7. Petty cash book meaning, types, examples, and faqs. A petty cash book is just another kind of cash book that records petty cash transactions. This petty cash book is prepared on the same lines of the simple petty cash book. Dec 15, 2020 the petty cash book is a recordation of petty cash expenditures, sorted by date. 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. 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. Keep this log readily available so you can fill it in on a regular basis taking the information off the petty cash vouchers. Cash book definition, types accounting format of cash book.
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