Back to Course


0% Complete
0/0 Steps
  1. Introduction to Booking Keeping and Accounting | Week 1
    9 Topics
    1 Quiz
  2. Introduction to Books of Account | Week 2
    5 Topics
    1 Quiz
  3. Subsidiary Books of Account I | Week 3
    4 Topics
    1 Quiz
  4. Subsidiary Books of Account II | Week 4
    4 Topics
    1 Quiz
  5. Principles of Double Entry Book Keeping | Week 5
    1 Topic
    1 Quiz
  6. Cash Book | Week 6
    6 Topics
    1 Quiz
  7. Petty Cash Book | Week 7
    1 Topic
    1 Quiz

Lesson Progress
0% Complete

The petty cash book is the book of original or prime entry which is used for recording small disbursements or expenses.

The reason behind the system is to reduce the numerous cash payment for small expenses. The source documents used in the petty cash book are invoices, receipts, and vouchers.

Imprest System:

This is a system for recording petty cash transactions, which are paid out of a cash float. In this system, a specified sum is given to the petty cashier at the start of the accounting period. This specified sum is called “Cash Float”. At frequent intervals, the petty cashier will reimburse for the amount spent, thus bringing it to the original amount.

Advantages of Petty Cash Book:

(i) It reduces or eliminates the risk of fraud.
(ii) It reduces the burden of the main cashier.
(iii) It makes monitoring and analysis of expenses very easy.
(iv) It reduces the number of accounts to be opened in the ledger account.
(v) Liability of the petty cashier can never exceed the imprest account.
(vi) It serves as training for young account clerks.

Procedures of Petty Cash Book:

1. Amount of float from the main cash book:
Credit: Cash book
Debit: Petty Cash book

2. Credit petty cash book with payments made and analyze them.

3. All payments made out of the petty cash book must be supported by authorized vouchers.

4. Analysis column must be totalled at intervals and the total transferred to their respective nominal ledger.

5. Reimburse the petty cash every week or month using the imprest system.

Format of Petty Cash Book:

Petty Cash Book


The following is a summary of the petty cash transaction of Johnson Nig. Ltd for March 2000.

March 1:Received from N1600
as petty cash floats.
March 2:Petrol   70
March 3:Postages90
March 4:Travelling   60
March 5:Postages25
March 6:Petrol   110
March 8:Travelling85
March 9:Cleaning90
March 10:Stationery45
March 12:Postages65
March 14:Cleaning   165
March 15:Petrol   90
March 17:Postages25
March 18:Motor expenses215
March 20:Cleaning105
March 22:Travelling45
March 24:Stationery95
March 30:Cleaning65
March 31:Kayode (Ledger)75

You are required to:

(a) Rule up a suitable Petty Cash book with analysis columns for Cleaning, Motor expenses, Postages, Stationery, Traveling and Ledger.
(b) Post the entries into the corresponding ledger accounts.


Petty cash
Screenshot 2022 07 22 at 07.19.27

Evaluation Questions:

1. Explain Imprest System

2. State the Advantages of Petty Cash Book

3. Prepare Petty Cash Book.

4. The following transactions were extracted from the books of Mercyland Trading Company as at 31st January 2005. All payment were made by cheque and all receipts were paid to the bank. The company maintains a float of N21,000

January 2:Cash at Eagle Bank20,000
January 2:Petty cash in hand 1,400
January 3:Drew Cheque for petty cash19,600
January 5:Received from Anthony Cheque in
settlement of his debt N32,600
less 10% discount.
January 6:Settled Tunde’s account for
N25,900 less 10% discount
January 7:Sold For Cash 20 MTN Cards
At N750 Per Card.
January 8:Transferred to Current account
from deposit account.
January 10:Paid Olu4,800
January 16:Paid Cheque for motor repairs8,000
January 17:Paid Ade3,800
January 24:Paid Kofi4,050
January 27:Paid Kwaime 4,200
January 29:Payment from petty Cash
during the Month were:
Sales and wages8,000
Trade expenses2,000
Sundry Purchases9,200

You are required to prepare:

(a) Two-Column Cash book (showing Discounts and Bank Columns only) for the month ended 31st January, 2005.

View Solution

(b) Petty Cash book for the same period.

View Solution


5. Academy Limited Operates an Imprest System with D20,000 paid out of bank. The following expenses were settled out of petty cash during the month of March, 2010

March 1:Wages1,500
March 2:Rates1,000
March 4:Postage Stamps100
March 5:Transport expenses4,100
Postage Stamps150
March 6:Wages500
March 10:Rates500
March 13:Frank Musa (Creditor)1,000
March 18:Wages1,200
Buina (Creditor)2,000
March 20:Rates1,500
March 24:Registered letters700
March 26:Rates500
March 28:Wages900
March 31:Wages1,000
March 31:Wages800
March 31:Float restored?

You are required to write up the petty cash book for the month of March 2010 having analysis columns for Rates, Postage, Transport, Wages and ledger.   (SSCE JUNE 2013)

View Solution


Your email address will not be published. Required fields are marked *

Evaluation Question 4A:


Evaluation Question 4B:


Evaluation Question 5:


error: Alert: Content selection is disabled!!