What is petty cash book? Write the advantages of the petty cash book.
What is petty cash book? Write the advantages of the petty cash book.
Petty cash book is maintained by the business to record petty cash expenses of the business such as conveyance, cartage, postage, telegram and other expenses (collectively recorded under miscellaneous expenses). These are generally repetitive in nature. In case all these transactions are recorded in the Main Cash book, their recording will not only be inconvenient but also consume a lot of valuable time for the cashier and the posting clerk. The cashier may be overburdened and the cash book may become very bulky. To avoid this, large organisations normally appoint one more cashier (petty cashier) and maintain a separate cash book to record these transactions.
Advantages of Petty Cash Book:
1. Division of labour: By delegating the work to a petty cashier the main cashier is able to look into other aspects of a firm.
2. Avoid bulky cash books: Recording repetitive transactions in a cash book makes it bulky, petty cash book makes it easy and avoids making cash book bulky.
3. Less error prone: Main cashier will be making periodic audits on the petty cash book, so it will be error free.
4. Ease of posting: Only the petty expenses are recorded periodically which makes posting easier.
Petty cash book is maintained by the business to record petty cash expenses of the business such as conveyance, cartage, postage, telegram and other expenses (collectively recorded under miscellaneous expenses). These are generally repetitive in nature. In case all these transactions are recorded in the Main Cash book, their recording will not only be inconvenient but also consume a lot of valuable time for the cashier and the posting clerk. The cashier may be overburdened and the cash book may become very bulky. To avoid this, large organisations normally appoint one more cashier (petty cashier) and maintain a separate cash book to record these transactions.
Advantages of Petty Cash Book:
1. Division of labour: By delegating the work to a petty cashier the main cashier is able to look into other aspects of a firm.
2. Avoid bulky cash books: Recording repetitive transactions in a cash book makes it bulky, petty cash book makes it easy and avoids making cash book bulky.
3. Less error prone: Main cashier will be making periodic audits on the petty cash book, so it will be error free.
4. Ease of posting: Only the petty expenses are recorded periodically which makes posting easier.
