2 types of petty cash book

Download petty cash book excel template exceldatapro. Petty cash book is maintained by the petty cashier and act as the petty cash book petty cash book 3. Petty cash book definition the petty cash book is defined as relatively small amount of cash kept at hand for making quick payments for miscellaneous small expenses in the business concern. The voucher would show the date, amount, recipient, purpose and general ledger account. Since the petty cash book analysis the expenses into a number of heads of expenses, the name given to it is analytical petty cash book. Cash book ledgers come in many different forms depending on the requirements of the business. However, its also important that you understand the business purpose for different types of cash accounts.

Documenting transactions is the way a business documents business expenses for tax purposes. Notes on types of cash book grade 11 principles of. Notes on systems of petty cash fund grade 10 accountancy. Simple cash book contains only one amount column on each side debit and credit for recording cash receipts and cash payments. It helps to control petty expenses more effectively by comparing of petty expenses between one and two period. Petty cash book the cash book as seen above is used for recording all major payments. The most important part of a petty cash system is the documentation of each transaction.

Sep 26, 2019 petty cash book is maintained to record small expenses such as postage, stationery, telegram. Called a petty cash fund, this cash is used for making small purchases in lieu of writing a check or using a company credit card. Cash book explanations show your love for us by sharing our contents. Thus, the book is part of a manual recordkeeping system. The following types of forms are used for operating the petty cash fund. A two column cash book has a pair of debit columns for recording cash and bank receipts, whereas. Due to lack of control, petty cash are always in a chance of misappropriating of the fund. Petty cash refers to a small amount of currency and coins that a company uses to pay small amounts without writing a check.

It is the book which is used for the purpose of recording expenses involving small amounts. It is another cash book which is maintained, generally, in large business concerns to reduce the burden of main cash book, in which numerous transactions involving petty small amounts are recorded. Concept and meaning of petty cash fund and system of petty. Some of the examples of cash book entries are given below showing the different situations. These types of transactions require more time and paperwork to complete. Normally the ledger will have receipts recorded on the left hand side debit entry and payments recorded on the right hand side credit entry. Petty cash book and types of petty cash book part 1 simple. Related posts meaning of petty cash book, its importance and advantages types of petty cash book. A large service business may have separate operating and payroll accounts. Other than the normal petty cash book, which resembles a normal cash book, there are two other types of petty cash books. It has only one money column on each of the debit and credit sides of the cash book. For smallscale business, simple petty cash book is sufficient but on a medium or large scale business number of petty expenses increases hence it is desirable to have the separate record for each type of petty expenses.

Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the daytoday normal. The firm may adopt imprest system of maintaining petty cash. Please differentiate for me the following types of cash books. Here we discuss the format of petty cash book, types of petty cash systems including the ordinary and imprest system. The petty cash book is a recordation of petty cash expenditures, sorted by date. These balances include savings and checking accounts. All petty expenses are paid through petty cash fund and their records are made in a separate book, which is known as petty cash book. Jul 16, 2019 the most important part of a petty cash system is the documentation of each transaction. Small or large companies maintain 2 types of petty cash book for all cash transactions of a business. These are expenses which are incurred day after day. A double two column cash book to record cash as well as bank transactions.

This article throws light upon the three main types of cash book that can be maintained in a farm business. The petty cash book is maintained by separate cashier known as petty cashier. You may find out that certain types might apply to your business more effectively and so you can format your log the same way. But, in every business a number of petty small payment like that for postage, carriage, stationery, entertainment, cartage, conveyance etc. There are two primary types of entries in the petty cash book, wh. Apr 16, 2020 petty cash procedures are established by businesses or other organizations to handle small amounts of cash. The amount of petty cash also known as the petty cash fund varies by company or organization.

The system in which petty cash fund is reimbursed for the petty expenses incurred is called imprest system of petty cash. It depends on the nature, volume and necessity of transactions of a business organization. It is recorded in a separated chart account which enables to reconcile daily between accounting record and logbook. Dec 20, 2007 a petty cash book is a book of vouchers which are prepared each time a disbursement is made from petty cash. Jul 02, 2018 in this video we will discuss what is petty cash book a subsidiary books in hindi for class 11th cbse icse and state boards and what are the different types of petty cash book i. The credit amount column is used for entering the petty payments in order of date. Meaning, types and importance of petty cashbook srd law notes. It is a special book that will record only one type of transactions cash transactions. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel. Petty cash would be susceptible to a accounting errors because it has no sufficient documents for tracking the cash. Petty cash book definition, types, format, examples. Petty cash book is a type of cash book that is used to record minor regular. For this purpose, a petty cashier is appointed by the firm, to pay for small payments usually below rs. Accounting entries in the cash book are then placed into the general ledger account.

There are two primary types of entries in the petty cash book, which are a debit to record cash received by the petty cash clerk usually in a single block of cash at. There are two primary types of entries in the petty cash book, which are a debit to record cash received by the petty cash clerk usually in a single block of cash at infrequent intervals, and a large number of credits to reflect cash withdrawals from the petty cash fund. Analytical petty cash book or columnar petty cash book is different from. Here we detail about the three types of cash book, i. Petty cash book meaning, cash book vs petty cash book. What is a cash book definition, explanation and types. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. Petty cash log receipt voucher record book tracker 8. The petty cash book template has 2 sections which are mentioned below. For this purpose, a petty cashier is appointed by the chief cashier. The credit side consists of several analysis columns. A doubletwo column cash book to record cash as well as bank transactions. Uses of petty cash book its a cash book used to enter daily petty expenses like cost of stationery, postage and xerox copy and so on.

The receipts are recorded in the dr side and the payments are recorded in the cr side of the cash book. Cash includes currency and coins, although most businesses do not keep much of this type of cash around. This requires additional labour and time, therefore businessmen do not use simple petty cash book in practice. There are four major types of cash book that companies usually maintain to account for their cash flows. Petty cash book is a ledger book, which is used to record petty cash expenses formally in chronological order, with the date. In this article, we take two types of examples of cash book single column and double column.

In an organization thousands of cash transactions occur in a year and journalizing them all is tedious work. Note that the fund is reimbursed by debiting individual expense account and crediting petty cash account. Analytical petty cash book an analytical petty cash book is one in which there is one amount column in its debit side and a number of columns on its credit side for different heads of expenses. Here we discuss the format of petty cash book, types of petty cash systems including the ordinary and imprest system along with its advantages and disadvantages.

A petty cash book to record small day to day cash expenditures. Petty cash procedures are established by businesses or other organizations to handle small amounts of cash. A company will assign a custodian whose job it is to make sure that all monies are accounted for through a receipt or. By keeping track of all petty cash transactions no matter how petty you have records to back up deductions for those small business expenses. Cash book the cash book is a ledger in the sense that it is designed in the form of a cash account and records cash receipts on the debit side and cash payments on the credit side. Two types of petty cash book maintained by small or large companies for easy, quick and accurate recording of all cash transactions. Payments in cash of small amounts like traveling expenses, postage, carriage etc. A petty cash can be theft by the employees of the organization. All those cash receipts are entered or posted on the. Three column cash book analytical petty cash book the imprest system of betty cash posting petty cash to the ledger looking. Under imprest system, a fixed amount of money known as float is. Financial journal that contains all cash payments and receipts, letting in bank withdrawals and deposits. This is the simplest form of cash book and is used in businesses where payments are made and received mostly in cash and where usually no cash discount is received or given. It is another cash book which is maintained, generally, in large.

The pages of a cash book are vertically divided into two equal parts. Lets discuss in detail the contents of the template. In most cases, the petty cash book is an actual ledger book, rather than a computer record. You may learn more about accounting basics from the following articles. Simple petty cash book has only one payment column where all payments into different groups and post it to respective ledger. A separate column is allotted for each type of expenditure. Petty cash book is maintained to record small expenses such as postage, stationery. Petty cash book 2019, imprest system of petty cash. Two types of petty cash book maintained by small or large. In this video we will discuss what is petty cash book a subsidiary books in hindi for class 11th cbse icse and state boards and what are the different types of. The is only one money column on the debit side and all sum received from time to time by the petty cashier from the chief cashier are entered in it. In this video, you will learn how to treat a contra entry in the cash book. Petty cash book is maintained to record small expenses such as postage, stationery, telegram. Verification of arithmetical accuracy of petty expenses.

A single column cash book to record only cash transactions. Cash is a current asset and is your most liquid of all current assets. Petty cash book is the accounting book that is used for the purpose of recording the petty cash expenditure i. Some companies have cash accounts for which they earn interest income. Besides maintaining a main or general cash book, many companies also maintain a small cash book known as petty cash book to record small day to day expenditures of the business. Petty cash book definition, types, format, examples imprest and. A triplethree column cash book to record cash, bank and purchase discount and sales discount. The difference between the total of the debit items and that of the total column on the credit represents the balance of the petty cash in hand. Petty cash book explanation, format, example, ordinary and imprest. Dec 06, 2019 cash book the cash book is a ledger in the sense that it is designed in the form of a cash account and records cash receipts on the debit side and cash payments on the credit side. Under the imprest petty cash system as the totals of different heads of expenditures are posted in ledger accounts after a. Petty cash book is a type of cash book, which use to record small amount of receipts and payment.

Until reimbursement is made, the expenditures made through petty cash fund should not be posted in the bank cash book. Petty cash book is an accounting book used for recording expenses which are small and of little value, for example, stamps, postage and handling, stationery, carriage, daily wages, etc. Petty cash book is the cash book which involves small cash payment and receipt during daily business operation. Read this article to learn about the following types of cash book and its preparation, i. Also included as a part of cash are the balances kept at banking and financial institutions. The most common examples are the single, two and three column cashbooks, however, it is possible to have multicolumn cash books, such as the petty cashbook, which can be used to. Though you can make your own petty cash log template, learning about the different types can help you out immensely.

These petty cash expenses are recorded in the petty cash book. Under a single column cashbook, only cash transactions done by the business are. The format of the analytical petty cash book is as. In simple petty cash book there is one column each for recording of receipt. A petty cash book is a book of vouchers which are prepared each time a disbursement is made from petty cash. The petty cash book is a book of vouchers which are made each time an expense is made. Single column cash book records only cash receipts and payments. Meaning, types and importance of petty cashbook srd law. In such a cash book there are preexisting columns for the usual expenses that recur quite frequently for an organization. Apr 07, 2020 petty cash book the cash book as seen above is used for recording all major payments. Petty cash book format example definition explanation. For recording transactions in the simple cash book, the foremost step is to understand. Apr 26, 2020 the petty cash book is a recordation of petty cash expenditures, sorted by date.