The petty cash book will be maintained by a separate cashier known as petty cashier in the accounting field. The petty cash book is defined as relatively small amount of cash kept at hand for making. Sep 17, 20 every payment is entered in the concerned head of petty expense and in total column. One of the total payment column and second in one of the analytical amount columns. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the daytoday normal expenditures of the business which is. Recording of transactions ii petty cash book solutions. Meaning of petty cash book, its importance and advantages. An analytical petty cash book is employed by a large concern having a number of transactions of petty amount such petty. Petty cash book is maintained to record small expenses such as postage, stationery, telegram. All the payments made are analyzed in the column of petty cash book itself, under the different heads of expenses.
Petty cash definition of petty cash by the free dictionary. The amount of petty cash also known as the petty cash fund varies by company or organization. Uses of petty cash book its a cash book used to enter daily petty expenses like cost of stationery, postage and xerox copy and so on. The additional analysis columns are used to analyze expenditures as they arise. Analytical petty cash book is a book in which there is only one amount column on the debit side and a number of columns on the credit side for different heads of expenses. As the petty cashier has to account for his expenses, before he can draw further sums, the petty cash book remains up to date.
It is the book which is used for the purpose of recording expenses involving small amounts. In big business apprehensions, the petty cash book is maintained in analytical form, with a detach column for each standard item of expense and a column for total. In big business apprehensions, the petty cash book is maintained in analytical form, with a detached column for each standard item of expense and a column for. Learn vocabulary, terms, and more with flashcards, games, and other study tools. It is important because this will prevent encumbrance of issuing a cheque as payment for small amount purchases or payments. In big business apprehensions, the petty cash book is maintained in analytical form, with a detached column for each standard item of expense and a column for the total. This kind of petty cash book is known as analytical petty cash book. Petty cash is a small amount of discretionary funds in the form of cash used for expenditures where it is not sensible to make any disbursement by cheque, because of the inconvenience and costs of writing, signing, and then cashing the cheque. These small cash payments are recorded in a separate book, known as a petty cash book. A petty cash is a cash book used to enter all small or petty expenses obtained. One major advantage of this system is that it saves time. The analytical cash book is a book kept by a 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. Petty cash book definition the petty cash book is defined as relatively small amount of cash kept at hand for making quick payments for miscellaneous small expenses in the business concern.
If my petty cash book has overdraft, then l will note more about my expenses. Mar, 2018 the petty cash book is a formal summarization of petty cash expenditures, sorted by date. This book records all those expenses which are small in amount and which are incurred on regular basis. A separate column is allotted for each type of expenditure. In a business operating this type of cash book, small cash payments are usually made out of petty cash. Considered as the most beneficial method of recording petty cash payments. 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 definition of petty cash book by the free. A petty cash book is a record of smallvalue purchases before they are later transferred to the ledger and final accounts. The analytical petty cash book and the imprest system. Small or large companies maintain 2 types of petty cash book for all cash transactions of a business. A petty cashier makes a detailed analysis of petty payments and records under suitable heads, i. It may be maintained by ordinary or by the imprest system. The petty cash book is ruled in the form of the single column cash book with an amount column and addition oat columns for the more usual classes of expenditure.
Cash book contains individual columns for each expense every small payment is recorded on the credit side. In most cases, the petty cash book is an actual ledger book, rather than a computer record. There might be a petty cash drawer or box in each department for. Petty cash book format example definition explanation. The imprest system is designed to provide a rudimentary manual method for tracking petty cash balances and how cash is being used.
While recording the transactions in petty cash book if all the expenses are analyzed and entries are recorded in cash book on the basis of this analysis such petty cash book is called analytical petty. The keeping of the book is not different from the keeping of the main cash book. A petty cash book is an accounting book used for recording expenses which are small and. Ppt petty cash book powerpoint presentation free to view. The petty cash book is to enter how the cash available for daily expenses are spent for example milk, tea, taxi charges and postage. How to prepare petty cash bookpetty cash book in hindi. A simple petty cash book is one in which there is one common column for date and particulars, for both the receipts and payments. Aug 23, 2016 columnar or analytical petty cash book with problem hindi the commerce tutor. Jul 02, 2018 in this video we will discuss what is petty cash book a subsidiary books in hindi for class 11th cbse icse and state boards and what are the different types of petty cash book i. It is the most advantageous method of recording petty cash payments. Petty cash is a small reserve of cash kept onsite at a business location for incidental cash needs. Petty cash book is a formal book of recording petty expenses which are incurred in cash. The most common way of accounting for petty cash expenditures is to use the imprest system.
Petty cash is the small amount of cash that is kept on hand by a company to pay for minor, inexpensive purchases during the normal course of operations. All petty payments are to be classified into different heads and different columns are maintained. Petty cash book is maintained by the petty cashier. Definition, explanation, format and system of petty cash. Petty cash book can be maintained either in a simple or in analytical way.
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. Petty cash book is maintained by the petty cashier and act as the petty cash book petty cash book. Recording of transactions ii petty cash book solutions this page contains the cbse. Petty cash book is maintained by the petty cashier and act as the petty cash book petty cash book 3. After using petty cash book, l can check whether there are extravagant expenses. Petty cash book definition, types, format, examples. In this book, separate columns are provided for usual head of expenditure. Petty cash book definition, types, format, examples imprest and. In the analytical version, a separate column is used for each commonly occurring item. Since the petty cash book analysis the expenses into a number of heads of expenses, the name given to it is analytical petty cash book. Petty cash book meaning, cash book vs petty cash book.
Sep 19, 2019 petty cash or the petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check. Thus business concerns may maintain main cash book and petty cash book separately. In analytical petty cash book, a separate column is provided for different heads of. This kind enables the businessman to know the information about the amount being spent on each head of petty expense. This type of cash book usually uses the imprest system. 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. Just as in the main cash book, all payments are credited in the petty. Petty cash book and types of petty cash book part 1 simple. Read this article to learn about the meaning and preparation of analytical and imprest system of petty cash book. A small amount of funds used instead of writting a check. Columnar or analytical petty cash book with problem hindi. Analytical petty cash book or columnar petty cash book is different from the simple petty cash book in the sense that in this type of petty cash book, an analytical presentation of cash payment is made.
In large business concerns, the petty cash book is maintained in columnar or analytical form, with a separate column for each usual item of expense and a column for total. While recording the transactions in petty cash book if all the expenses are analyzed and entries are recorded in cash book on the basis of this analysis such petty cash book is called analytical petty cash book. Apr 07, 2020 petty cash book the cash book as seen above is used for recording all major payments. Petty cash book and types of petty cash book part 1 simple, analytical for class11th in hindi duration. Analytical petty cash book an analytical petty cash book is one in which there is one amount column in its debit side and a number of columns on its credit side for different heads of expenses. When petty expense is recorded in total payment column, the same amount is recorded in the relevant petty expense column. Credit side consists of more analysis columns in the petty cash book. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. Besides 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 are maintained as a miscellaneous funds to be readily available for usage to minor transactions involve in a business operation. Petty cashier is a person, who maintains the petty cash book. These are expenses which are incurred day after day. The difference between the total of the debit items and that of the total column on the credit represents the balance of the petty cash in hand. Petty cash book is a ledger book, which is used to record petty cash. Petty cash book this records the actual amounts spent from petty cash during the month. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel.
As the petty cashier cannot draw as and when he likes, it prevents unnecessary accumulation of cash in his hand thus the chances of defalcation of cash are minimised. In module 12, which covered the bank cash book, the advantages of paying all cash and cheques into the bank intact were evident. Related topic difference between cost and management accounting analytical petty cash book. Petty cash is often used to pay for postage, small office supplies, and other small purchases. An imprest is a cash account that a business uses to pay for small, routine expenses. A fixed balance is maintained in the account, and it is replenished routinely to maintain that. Apr 26, 2012 petty cash book is a part of accounting cycle it is prepaid for the normal daiy expenditres of the organization. Jul, 2019 the imprest system is an accounting system for paying out and subsequently replenishing petty cash.
But, in every business a number of petty small payment like that for postage, carriage, stationery, entertainment, cartage, conveyance etc. Meaning of petty cash book a petty cash book is one in which all petty or small payments made through petty cash fund are recorded systematically. Petty cash book helps us to manage money in a clear and efficient way. It is another cash book which is maintained, generally, in large business.
What is the importance of petty cash in a business. Thus, the book is part of a manual recordkeeping system. Record the following transactions in an analytical petty cash book for. In this type, a separate column for each petty expense is provided on credit side. Petty cash refers to a small amount of currency and coins that a company uses to pay small amounts without writing a check. Cash book, types of cash book, petty cash book, problem.
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