How to prepare analytical petty cash book in excel spread sheet. 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 the most common way of accounting for petty cash expenditures is to use the imprest system. For this purpose, a petty cashier is appointed by the chief cashier. Petty cash book is a ledger book, which is used to record petty cash.
Credit side consists of more analysis columns in the 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. Apr 26, 2020 the petty cash book is a formal summarization of petty cash expenditures, sorted by date. Both cash column and bank column of double column cash book are totaled and balanced at the end of an appropriate period. The petty cashier of john and james company paid cash for the following expenditures during march 2018. There are two primary types of entries in the petty cash book, which are a debit to. A petty cash book is an accounting book used for recording expenses which are. 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.
The date of transaction is written in this column in two linesin the first line, the year and in the second line, the name of. Meaning, types and importance of petty cashbook srd law notes. What is the importance of petty cash in a business. Thus, the book is part of a manual recordkeeping system. Meaning of petty cash book, its importance and advantages. Imprest system of petty cash fund the world impress means advance amount which is personal to certain person to make petty expenses. 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. Petty cash is often used to pay for postage, small office supplies, and other small purchases. The most common way of accounting for petty cash expenditures is to use the imprest system. 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. Definition and explanation of cash book format, advantages.
How the imprest system of petty cash book works your. Petty cash book can be maintained either in a simple or in analytical way. The same process is also applicable to a double column cash book. The analytical petty cash book and the imprest system. The main advantages of petty cash book publish your article. When petty expense is recorded in total payment column, the same amount is recorded in the relevant petty expense column. It is a system of petty cash book where a person is given a fixed amount in the beginning of the period, the petty cashier submits the account of. There is no hard and fast rule for the number of columns in the analytical petty cash book. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. Petty cash book explanation, format, example, ordinary. Petty cash is the small cash reserves that businesses keep on the. Now let me explain it to you with an example problem. Many expenses of small nature are recorded in petty cash book. Petty cash has its own asset account and is reconciled at the end of every period.
Since the petty cash book analysis the expenses into a number of heads of. It should be used in conjunction with procedural information, resources, and forms, which outline the application of this policy and may be found on the petty cash administration section of the gateway to financial activities website fingate. All petty payments are to be classified into different heads and different columns are maintained. This type of cash book usually uses the imprest system. An imprest system of petty cash means that the general ledger account petty cash will remain dormant at a constant amount. In most cases, the petty cash book is an actual ledger book, rather than a computer record. This guide memo outlines policy on establishing and managing a petty cash fund. Receipts are recorded on the debit the left hand side, and payments are recorded on the credit right hand side. 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. In order to put money into the petty cash account, money has to be taken out of the business checking account. A separate column is allotted for each type of expenditure. Lecture 5 the analytical petty cash book and the imprest system every business has a number of transactions of very small value which, were they all recorded in the cash book, would only serve to make it more difficult to identify the important transactions that businesses need to keep a close eye upon.
This article covers the terminologies in the petty cash book system of accounting, the definition of terms and the analysis of payments. When a business doesnt provide access to company credit cards, or employees would rather not wait to be reimbursed for purchases, using petty cash is a simple alternative. In module 12, which covered the bank cash book, the advantages of paying all cash and cheques into the bank intact were evident. Petty cash definition of petty cash by the free dictionary. Petty cash book is maintained to record small expenses such as postage, stationery, telegram. A small amount of cash kept on hand by a business for incidental expenses. Analytical and imprest system of petty cash book your article library. 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. This is the only amount of cash that is not immediately deposited in the bank account after it is received. 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.
Cash book contains individual columns for each expense every small payment is recorded on the credit side. Petty cash book is maintained by the petty cashier. Petty cash book definition, types, format, examples imprest and. Review your petty cash register before you replenish the petty cash fund. What are the nature of transactions that are recorded in the petty cash book.
One of the total payment column and second in one of the analytical amount columns. It is an accessible, convenient way to pay for small purchases. Cash book contains cash transactions passing into and out of a business. The petty cash is a small amount of discretionary finances in the business firm of cash. 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. As head cashier checks the accounts of previous month and gives advance for the coming month, thus, errors if any are reduced. The petty cash book is a formal summarization of petty cash expenditures, sorted by date. In large business concerns, the petty cash book is maintained in columnar or analytical form, with a separate column for. Petty cash is also the title of the general ledger current asset account that reports the amount of the companys petty cash. Petty cash book definition, types, format, examples. 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. Petty cash book format example definition explanation. Imprest system of petty cash is a system where the petty cashier is given a lump sum in cash often called a float keeping in view the possible needs of the business to meet its petty expenses for a stated period, e. Double column cash book explanation, format, example.
Notes on systems of petty cash fund grade 10 accountancy. Considered as the most beneficial method of recording petty cash payments. 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. An analytical petty cash book is employed by a large concern having a number of transactions of petty amount such petty. This fund is accounted for like it was another bank account. There are two primary types of entries in the petty cash book, which are a debit to record cash received. Record the following transactions in an analytical petty cash book for the month of. Apr 07, 2020 petty cash book the cash book as seen above is used for recording all major payments. A petty cashier makes a detailed analysis of petty payments and records under suitable heads, i. A petty cash is a cash book used to enter all small or petty expenses obtained. Petty cash book supplies information regarding petty payments made on different heads more easily and quickly. How to prepare petty cash bookpetty cash book in hindi.
In a business operating this type of cash book, small cash payments are usually made out of petty cash. 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 expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal labor etc. But, in every business a number of petty small payment like that for postage, carriage, stationery, entertainment, cartage, conveyance etc. You need to develop a set of policies or procedures dictating the handling of cash in your business to avoid problems such as theft and misappropriation. The petty cash book is to enter how the cash available for daily expenses are spent for example milk, tea, taxi charges and. 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. Furthermore, keep a microsoft excel doc or other spreadsheets that tracks who spent what, when it was spent, and the total amount of spending for both the. It varies according to the transactions carried out by trader. In the analytical version, a separate column is used for each commonly.
Regularly checking the petty cash book is balanced when the money in the fund is low, they have to request that cash be withdrawn from the bank in order to replenish the money that has been paid out. For recording the expenses in this book whole of the petty expenses. Petty cash book and types of petty cash book part 1 simple. The date of transaction is written in this column in two linesin the first line, the year and in the second line, the name of the month followed by the actual date. It should be used in conjunction with procedural information, resources, and forms, which outline the application of this policy and may be found on the petty cash administration section. The primary bookkeeping record in singleentry bookkeeping is the cash book, which is similar to a checking account register in uk. In this book, separate columns are provided for usual head of expenditure. There might be a petty cash drawer or box in each department for.
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. 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. The ruling of analytical petty cashbook is given below. Petty cashier is a person, who maintains the petty cash book. A column for sundries is usually added for miscellaneous payments. In this video ive explained about petty cash book which is a ledger kept with the petty cash fund to record. The process of balancing and posting a cash book has been explained in detail in single column cash book article. Just like the cash book, the petty cash book is both a book of original entry and a ledger. Petty cash book meaning, cash book vs petty cash book. Petty cash book definition of petty cash book by the free. These small cash payments are recorded in a separate book, known as a petty cash book. As the petty expenses are recorded by petty cashier hence the labor. This book records all those expenses which are small in amount and which are incurred on regular basis. How the imprest system of petty cash book works your business.
The credit side consists of several analysis columns. Definition, explanation, format and system of petty cash. Petty cash is an easy to understand and familiar method of paying for company expenses. A cash book is a type of subsidiary book where cash or bank receipts and cash or bank payments made during a period are recorded in a chronological order. A petty cash log is a document to record all the important financial information. The initial fund would be created by issuing a cheque for.
Cash that a company keeps available for small transactions with customers. Petty cash book is a formal book of recording petty expenses which are incurred in cash. Petty cash book makes possible for making comparison of the petty expenses between two periods and helps in controlling such petty expenses more effectively. Its also vital to ensure that you have a sturdy and lockable petty cash box where you keep all the money safe. 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.
General cash book is subdivided in the single column, double column, and treble column cash book. The additional analysis columns are used to analyze expenditures as they arise. Petty cashier meaning in the cambridge english dictionary. The analytical cash book is a book kept by a petty cashier. In almost all businesses, it is found necessary to keep small sums of ready money with the cashier or petty cashier for the purpose of. The keeping of the book is not different from the keeping of the main cash book the amount paid out by the chief cashier is credited in his cash book to complete the double entry. Separate account records are maintained for petty cash, accounts payable and receivable, and other relevant transactions such as inventory. Petty cash book definition of petty cash book by the. It is the most advantageous method of recording petty cash payments.
The petty cash book will be maintained by a separate cashier known as petty cashier in the accounting field. In this type, a separate column for each petty expense is provided on credit side. 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. Totals are carried forward from page to page until the end of the periods. Write out an analytical petty cash book from the following. Entries are recorded just like a ledger account with the help of. A petty cash book is a record of smallvalue purchases before they are later transferred to the ledger and final accounts. Explanation of columns in the analytical petty cash book. May 28, 2019 each entry in the petty cash book should include the date, the amount, and what was purchased with the petty cash. How to prepare petty cash bookpetty cash book in hindi with.
Let us learn about the petty cash book and the various systems of maintaining the said. It is a system of petty cash book where a person is given a fixed amount in the beginning of the period, the petty cashier submits the account of expenses keeping surplus amount himself. 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. Relatively small amount of cash kept at hand for making immediate payments for miscellaneous small expenses. Petty cash or a petty cash fund is a small amount of money available for paying small expenses without writing a check. Petty cash book explanation, format, example, ordinary and. Most cash should be deposited right away in the bank, but a small amount can be kept on hand in a petty cash account earmarked for minor.
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