Question

What is petty cash book? How is it prepared?

Answer 1

Recording of repetitive expenses in cash book will burden the cashier. Hence, a separate book is created where petty expenses are recorded. Examples of such type of expenses are: Stationery, Refreshment, Postage, Conveyance, etc. Petty cash book is maintained by Petty cashier.

Preparation is mostly done by Imprest System as it is more convenient. In this system, petty cashier is given a pre-defined sum of the money for a period. At the end of the period, the amount spent by him is reimbursed by main cashier so that the petty cashier has the same amount again at the start of the period.