PETTY CASH BOOK:
Petty Cash Book is the book which is used for the purpose of recording
expenses involving small amounts. Besides petty expenses, receipts from main
cash are recorded. Petty Cash Book is maintained by Petty Cashier and acts as
the Petty Cash Account.
In a business a number of small payments, such
as for conveyance, stationery, cartage, etc., have to be made. If all these
payments are recorded in the Cash Book, it will become voluminous. Therefore,
it is usual for firms to appoint a person as 'Petty Cashier' and to entrust the
task of making small payments.
Recording of Petty Cash:
Petty cash given to the Petty
Cashier for small payments is recorded on the credit side of the Cash Book as
'By Petty Cash Account' and is posted to the debit side of the Petty Cash
Account in the Ledger.
SYSTEM OF PETTY CASH:
Petty Cash Book may be maintained by
ordinary system or by imprest system. In case of Ordinary System of Petty Cash,
Petty Cashier is given appropriate amount of cash and after spending the whole
of that amount, he submits the account to the Head Cashier.
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