What is a Petty Cash Book? Importance & Types of Petty Cash Book

What is a Petty Cash Book?Importance & Types of Petty Cash Book

Meaning of Petty cash book

A cash book which is created for the small payments of an organization i.e. taxi fare, bus fare, carfare, postage and stamps, stationary wages tea and coffee etc. it has a provideparate found to meet the day to petty expensive in the office is called petty cash book. It is established in the responsibility of petty cashier who maintain a separate cash book to record, such 

small payments only. The petty cashier may operate the fund either on the ordinary systems or impress systems of petty cash book.

1. Ordinary systems of petty cash: under this system petty cashier is given a certain amount of cash for meeting petty expenses of the office, when he spends nearly the whole amount, he submits the amount of expensive along with surplus amount. If necessary he will be given another sum for petty payments for subsequent period.

2. Impress system of petty cash book: the world 'impress' means' advance amount' which is personal to certain person to make petty expenses. It is a systems off petty cash book where a person (petty cashier) is given a fixed amount in the beginning of the period, the petty cashier submit the account of expenses keeping surplus amount himself. The main cashier gives to the petty cashier another sum for he reimbursement of the found which equals the amount spent by him during the period. Thus every time petty cashier begins the next period with the same amount of float, under this system, petty cash fund is reimbursed for the petty expenses incurred is called impress systems of petty cash book.
Advantages/objectives/importance of petty cash book:

1. It makes records of all petty expenses are payments systematically.
2. It reduces the use of cheques and also avoids the inconvenience of issuing cheque for small payments maximum 500rupease.
3. It helps in making the records of cash transactions up to-date because of division of labour in recoding cash transactions.
4. It provides information regarding petty payments made on different heads more easily and quickly.
5. It helps to control petty expenses more effectively by comparing of petty expenses between one and two period.

Types of petty cash book

1. Simple petty cash book
2. Analytically petty cash book

Simple petty cash book
Simple petty cash book means this book is similar to single ash book where only on amount column is maintained in each side of such book. Amount received from head cashier is entered on the debit side of cash book and all petty payment are made by cashier are recorded in credit side. At last, the balance amount is found amount is found out. Its specimen of is given below.

Analytically petty cash book

Under this systems are special for separate column is provided for each heading of petty expenses in credit side of cash book. The debit sides of petty cash book contain only one column for the cash received from the cashier. When there is large number of transaction, only most common petty expenses are assembled in the sundry expenses or miscellaneous expenses column.