Preparation of petty cash book

Preparation of petty cash book 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. 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. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. Petty cash is a system that funds and tracks small purchases such as parking meter fees that arent suitable for check or credit card payments. Petty cash book is a formal book of recording petty expenses which are incurred in cash. Such a cash book is maintained by the petty cashier who in most cases also handles the petty cash. The petty cashier of john and james company paid cash for the following expenditures during march 2018. 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. Totals are carried forward from page to page until the end of the periods. A petty cash book is created to facilitate small payments in a business or. In almost all businesses, it is found necessary to keep small sums of ready money with thecashier or petty cashier for the purpose of meeting small expenses such as postage, telegrams, stationary and office sundries etc. Hence, the petty cash book is one in which all small items of expenses are recorded in a systematic manner. Similarly, when the petty cash fund is reimbursed, it affects on the credit side of bank account and budget expenditure account of the bank cash book. Add extra cash to the petty cash fund by withdrawing from the companys account.

Petty cash book format example definition explanation. How process transactions in the petty cash book for more go to to donate. The petty cash book is a recordation of petty cash expenditures, sorted by date. Petty cash accounting procedures reconciliation uses. 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 book is a type of cash book that is used to record minor regular.

In the books of ms xyz limited you have been asked to check the cash book ms. This excel cash book is suitable for any small business that wants an easy bookkeeping method a simple way to track your income and expenses. Businesses maintain a cash book to record various transactions. Thus, the book is part of a manual recordkeeping system. 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. The district education office, sindhuli created a petty cash fund of rs 400 on 1 st falgun. Managing a petty cash account for your small business. There are two primary types of entries in the petty cash book, which are a debit to record cash received. Generally petty cash book is maintained on imprest system.

In most cases, the petty cash book is an actual ledger book, rather than a computer record. This is the simplest form of cash book and is used in businesses where payments are made and received mostly in cash and where usually no cash discount is received or given. Dot nepal presents useful notes for the bank exam preparation. Columnar petty cash book contains many money columns to record day to day expenditures. 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. The petty cashier must present all paid receipts to the company cashier in order to replenish the fund d.

A petty cash is a cash book used to enter all small or petty expenses obtained. One is used to record cash transactions, the second is used to record bank transactions and third is used to record discount. 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. Procedure 4001, petty cash funds procedure 4002, imprest checking accounts procedure 4004, preparation of cash fund request procedure 4005, preparation of petty cash voucher. The additional analysis columns are used to analyze expenditures as they arise. Keep all receipts together, fastened by a paper clip, in the petty cash box or book.

So, the book, wherein day to day petty expenses for a particular period of a business concern, are recorded in chronological order of dates is called petty cash book. So since the number of such transactions tends to be very high we maintain a separate cash book for them the petty cash book. A petty cash receipt will have a signature line for the person receiving a disbursement from the fund. In order to gain deep understand, please refer to the petty cash book example below. The main benefits or advantages of petty cash book can be pointed out as follows. Label the four resulting columns date, purchase, amount and balance. Balancing the cash book the cash book is balanced in the same way as a ledger account. You can find the questionsanswerssolutions for the chapter 4 of cbse class 11 accountancy in this page. A single column cash book always shows debit balance debit side exceeding credit side because more cash cannot be paid than what we have. Free online cash book etc practice and preparation tests. Columnar petty cash book and its preparation process. Head cashier will give the petty cashier the estimated amount to start with. Read this article to learn about the meaning and preparation of analytical and imprest system of petty cash book.

It is another cash book which is maintained, generally, in large business. It checks the errors and states them in brs bank reconciliation statement. Petty cash is a convenient alternative to writing checks for smaller transactions. The original petty cash voucher is stapled to the original supporting documents retail store sales slip, cash register tape, or other original receipt and forwarded to accounts payable with the petty cash replenishment request see procedure 4006, preparation of petty cash replenishment request at the time of petty cash fund replenishment. 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. Entries in the cash book are then posted into the general. Petty cash book is a formal summarization of petty cash expenditures, sorted by date. The petty cash fund is an accounting tool that helps you to manage and track small purchases that are not appropriate to make a check payment or using your credit card.

Tips keep the petty cash book and box or tin in a safe place, such as the accountants or managers office or cubicle. Petty cash book and types of petty cash book part 1 simple, analytical for class11th in hindi. For this purpose, a petty cashier is appointed by the chief cashier. Petty cash book explanation, format, example, ordinary and imprest. To verify the accuracy of the cash book, it should be balanced daily which may be shown in the cash book with red pencil. Using petty cash for your small business patriot software. Read this article to learn about the following types of cash book and its preparation, i.

When creating a petty cash account, be sure to document the origin of the cash you use to start with, and also keep a petty cash book to track your every petty cash purchases. This book records all those expenses which are small. Exam preparation quizzes, tests and mock exams to ensure that you are 100% ready. Petty cash book explanation, format, example, ordinary. 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. Imprest system under this system management estimates the expenditure roughly for a period of week or month. It facilitates preparation of main cash book quickly and easily by minimizing the number of small cash transactions. Practice questions on journal, cash book, depreciation etc for full functionality of this site it is necessary to enable javascript. Include fields for calculating a running balance and for recalculating this balance. Prepare petty cash book on imprest system from the following particulars for minha shukat ltd.

Uses of petty cash book its a cash book used to enter daily petty expenses. 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. The process of comparing both the records is reconciliation. A petty cash book should provide a clear, simple system for tracking how much money is currently in the fund. A three column cash book or treble column cash book is one in which there are three columns on each side debit and credit side. The cash book is 100% free for you to download and use forever, and it is fully customizable so you can change. In most cases, the petty cash book is an actual ledger book. Then chief cashier pays him the amount which he spent, so that original amount of petty cash with which he. All petty expenses are paid through petty cash fund and their records are made in a separate book, which is known as petty cash book. 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.

In addition, reconciliation takes place every month to maintain the balance between the two records. Petty cash book preparation in financial accouting youtube. Petty cash book definition, types, format, examples imprest and. The petty cash book will be maintained by a separate cashier known as petty cashier in the accounting field. All petty cash receipts are turned in to the company cashier at the end of each day. Cash book and petty cash book introduction of cash book. Cash book is the description of cash inflow and outflow of an organization on given period of time.

Petty cash, or petty cash fund, is a small amount of cash your business keeps on hand to pay for smaller business expenses. Petty cash replenishment request form usnhf46 obtain blank forms from. Recording of transactions ii petty cash book solutions this page contains the cbse accountancy class 11 chapter recording of transactions ii notes. The receipts are recorded in the dr side and the payments are recorded in the cr side of the cash book. You may continue this throughout the notebook upon starting the petty cash book or rely on. At the end of the period the petty cashier balances his book. Recording of transactions ii petty cash book solutions. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure.