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Petty Cash Book

The balance o...

Question

The balance of petty cash is?

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Solution

(A) An asset

(B) A liability

(C) An expense

(D) An income

Answer: (A) An asset

Explanation: The balance of a petty cash book is an asset as it is treated as a current asset. Having any remaining balance or unused balance from the petty cash fund also becomes an asset because the business has saved the money from being spent.

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Q. Record the following transactions in a Petty Cash Book drawn with suitable columns and then balance the same:

2017		(₹)
Jan. 1	Petty cashier is given a monthly imprest amount of ₹ 10,000. He spent last month ₹ 9,200 and got the balance from the head cashier today.
Jan. 2	Paid for Wages	600
Jan. 3	Paid for sundry expenses	100
Jan. 5	Paid for stationery	700
Jan. 9	Paid for courier charges	200
Jan. 12	Stamps purchased	750
Jan. 14	Paid wages to casual labour	500
Jan. 16	Stationery purchased	400
Jan. 19	Paid for general expenses	610
Jan. 20	Paid for cartage	800
Jan. 22	Paid for advertising	900
Jan. 24	Paid for postage	400
Jan. 25	Paid for Taxi Fare	840
Jan. 27	Paid for entertainment	600
Jan. 29	Paid for carriage	500
Jan. 31	Paid for petty repairs	700

What is petty cash book? Write the advantages of petty cash book?

Q. The balance of the petty cash book is ___________.

Q. Balance in petty cash book represents.

Q. The balance in the Petty Cash Book represents income.

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