Petty Cash Book

What is a Petty Cash Book?

The petty cash book is a book of first entry and a ledger kept exclusively for small expenses, made in cash out of an agreed sum of money called petty cash. This book is similar to the cash book.

Benefits of Petty Cash Book:

An organisation using the petty cash book in addition to the main cash book will deserve the following benefits:

1. Minor expenses like postage, stationery, travelling expenses, repairs, cleaning etc., which are usually a lot, are taken to the petty cash book.

2. When the petty cash book is kept, the job of the main cashier is reduced.

3. The time wasted in posting minor expenses to the ledger daily is saved

4. The imprest system used for maintaining the petty cash book is an in-built check system. 

5. It serves as training for young account clerks.

A petty cashier is responsible for handling the petty cash book. Payments made by the petty cashier are supported by a petty cash voucher, which shows the signature of the person receiving the money and the reason for the payment.