At the end of each month when the petty cashier approaches the main cashier for reimbursement, the latter cashier prepares a cheque voucher in which he lists the total of various payment analysis columns of the petty cash book. To track the cash, create a petty cash account in the asset section of your chart of accounts. Always the voucher would show the amount, purpose, recipient, general ledger account number and date relating to the expenses. There are two primary types of entries in the petty cash b. Maintaining a cash book under the stated system is called an imprest petty cash book. Due to lack of control, petty cash are always in a chance of misappropriating of the fund. Nov 27, 2019 the difference in this example of 10, has been written off to sundry expenses. Mar, 2018 the petty cash book is a formal summarization of petty cash expenditures, sorted by date. If you decide to establish a petty cash fund, doing the following can help simplify your petty cash accounting responsibilities.
Controllimitkeep track of petty cash expenditure the cash remaining and the vouchers received should equal the imprest can help to reduce fraud or other suitable advantage. Petty cash book is maintained to record small expenses such as postage, stationery, telegram. 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. Prepare a blank petty cash log utilizing a small book or you can use this free pdf template. Hence, the petty cash book is one in which all small items of expenses are recorded in a systematic manner made through petty cash fund.
How to prepare petty cash bookpetty cash book in hindi. The petty cashier will record this amount on the debit side of the petty cash book while the chief cashier will record the same amount on the credit side of the main cash book. If so, you need to record deposits and withdrawals in your books. When cash is received it is entered on the debit or left hand side. For example, employees cannot use petty cash to buy themselves coffee. Petty cash is a small amount of money, but it adds up quickly as its replenished. Dec 27, 2018 petty cash funds are used to purchase items for your business, reimburse employees who purchased business items, or to make change. Petty cash book template excel software accountant. Petty cash book explanation, format, example, ordinary. The first row is for the company name and second for the title of the template.
A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. After this, the owner possibly releases the cash from the cash book to the petty cash account and the transaction i discussed earlier takes place. Before the rise in the use of credit cards and charge cards, nearly all companies used petty cash accounts to allow employees responsible for purchasing small supplies to do so with minimal hassle. Enter the date and cash value for the opening balance to get a summary with updated cash balance in real time. Petty cash is stored in a petty cash drawer or box near where it is most needed. Most of the companies are using this accounting tool to kept the sufficient amount of money at office to buying small things that are require. A cash book acts like both a journal and a ledger for cash transactions. Keep this log readily available so you can fill it in on a regular basis taking the information off the petty cash vouchers. In an organization thousands of cash transactions occur in a year and journalizing them all is tedious work.
On april 1, 2017, hassan sajjad store cash book showed debit balances of cash rs. Safes are given a rating specifying the maximum value of cash to be held in the safe. Petty cash book is the accounting book that is used for the purpose of recording the petty cash expenditure i. When youre ready to replenish the fund, record the expenses in your accounting software based on the petty cash expense log. Create a petty cash log that details what was purchased, the amount of the purchase, the date it was purchased, the account affected e. Petty cash refers to a small amount of currency and coins that a company uses to pay small amounts without writing a check. Petty cash is the small cash reserves that businesses keep on the. Enter the following transactions in the petty cash book of sonia manzoor. The simple petty cash book has only two amount columns. All receipts are recorded on the debit side and all payments are recorded on the credit. Petty cash is a small amount of cash that is kept on the company premises to pay for minor cash needs. Double column cash book explanation, format, example. The main advantages of imprest system of petty cash are as follows.
Large businesses maintain petty cash book to reduce the burden of main cash book. For example, if you bought a screw at the corner hardware store, you might. 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 provide further analysis of receipts and payments. There might be a petty cash drawer or box in each department for. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the daytoday normal expenditures of the business which is not related to the direct line of the business.
There is a page of quick tips notes to get you started fast with your bookkeeping. Two types of petty cash book maintained by small or large companies for easy, quick and accurate recording of all cash transactions. 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. Sep 30, 2018 petty cash book is a formal book of recording petty expenses which are incurred in cash. Simply can say pocket money for offices minor expenses. Definition and explanation of cash book with examples. I hope this video help you to solve your practical problems.
The cash book is updated from original accounting source documents, and is therefore a book of prime entry and as such, can be classified as a special journal. This petty cash reconciliation form example has a template where you can categories every information that is related to the usage of the petty cash. Examples of these payments are office supplies, cards, flowers, and so forth. A petty cashier receives a fixed amount of money from the head cashier with which he meets petty expenses of a certain period and records in chronological order of dates in the petty cash book. This format is an excellent way to monitor the current amount of petty cash remaining on hand. Types of petty cash book in accounting with diagrams and examples small or large companies maintain 2 types of petty cash book for all cash transactions of a business.
A petty cash book can either be a simple petty cash book or an analytical petty cash book. Petty cash book definition, types, format, examples. Excel cash book example example cash book template. The receipt column is used to record the opening balance. The petty cash book is a book of vouchers which are made each time an expense is made from petty cash money. Like a general cash book, a petty cash book has a debit and a credit side. Petty cash may also be used for small ad hoc costs that arise e. How process transactions in the petty cash book for more go to to donate. In most cases, the petty cash book is an actual ledger book, rather than a computer record. The cash replenishment of 75 is now added to the current cash held of 25 thereby restoring the petty cash fund back to the original fixed amount of 100.
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 other words, we can say that if we add a bank column to both sides of a single column cash. Petty cash book is an accounting book used for recording expenses which are of small and of little value. A petty cash book is just another kind of cash book that records petty cash transactions, i.
As the petty cashier has to account for his expenses, before he can draw further sums, the petty cash book remains up to date. A separate column is allotted for each type of expenditure. 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. Cash book is a book of original entry in which transactions relating only to cash receipts and payments are recorded in detail. This book records all those expenses which are small in amount and which are incurred on regular basis. At the end of the month petty cash book receipt and payment column is totaled and balanced here total payments are balance cd i. Required a state one advantage of the imprest system of petty cash. Petty cash book is a readytouse excel template to systematically record and manage your petty or small daily routine payments. Petty cash book definition, types, format, examples imprest and. It is recorded in a separated chart account which enables to reconcile daily between accounting record and logbook. Cash book definition, example and format of cash book.
Petty cash book sample the petty cash book format provided below is crucial in highlighting the running balances to help the petty cashier regulate various allocations. A petty cash book is a ledger kept with the petty cash fund to record amounts that. The double column cash book also known as two column cash book has two money columns on both debit and credit sides one to record cash transactions and one to record bank transactions. The chief cashier advances a sum of money to the petty cashier to enable him to meet petty expenses for a fixed period. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel. When the head cashier pays some amount of cash to a petty cashier for petty expenses then he makes a statement of petty expenses paid by him in the fixed period of time is called petty cash book. The petty cashier of john and james company paid cash for the following expenditures during march 2018. The petty cash book is to enter how the cash available for daily expenses are spent for example milk, tea, taxi charges and postage.
The cash book is 100% free for you to download and use forever, and it is fully customizable so you can change anything in it. It is worth spending some time on the example, entering figures to see what your outcome is before starting on your version. An imprest system is a method to account for petty cash by maintaining a balance in a fund that equals petty cash receipts plus additional cash in the fund. Similarly, when cash is paid out the same is recorded on the credit or right hand side of the cash book. Petty cash is commonly associated with storefronttype businesses who deal with clients who may pay in cash. 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. Scroll down to step 2 below for a completed example. A petty cash is a cash book used to enter all small or petty expenses obtained. What is the production insurance policy limit for the amount of cash that can be kept in the company premises and does the policy also require that the money is kept in a safe. A petty cash can be theft by the employees of the organization. A petty cash supply allows such business to more easily make change for large denominations of currency. A s the petty cashier has to produce to the chief cashier the petty cash book for inspection, it acts as a healthy check on the petty cashier.
This template is easy to use and an effective way to get control of your operating cash flow and expenses in real cash. 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. The template that has been provided here is a perfect template for the kind of cash receipt you need for the proper management of the petty cash. This excel cash book is suitable for any small business that wants an easy bookkeeping method a simple way to track your income and expenses. Download petty cash book excel template exceldatapro. A petty cash book is an accounting ledger may contain transactions of small amount of money for regular expenditures on small items. Record and monitor all cash on hand transactions with this petty cash book template. These tools can be used to gauge your knowledge of what these funds can. The amount of petty cash also known as the petty cash fund varies by company or organization. Petty cash is an important method of running an effective organization. As the petty cashier cannot draw as and when he likes, it prevents unnecessary accumulation of cash in his hand thus the chances of defalcation of cash are minimised. Petty cash book is a type of cash book, which use to record small amount of receipts and payment. Having mentioned the advantages and disadvantages of petty cash policies, it is only right to have to list down the dos and donts for your petty cash policy in order to have your business lean more on the advantageous side.
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 a formal summarization of petty cash expenditures, sorted by date. Accounting for petty cash explanation, related controls. Sep 19, 2019 petty cash or the petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check. Cash includes currency and coins, although most businesses do not keep much of this type of cash around. Petty cash would be susceptible to a accounting errors because it has no sufficient documents for tracking the cash. Check your understanding of a petty cash fund in this worksheet and quiz. The chief cashier advances a sum of money to the petty cashier to enable him to meet. The employee, who keeps the petty cash book, is called petty cashier. Dec 17, 2019 cash book in accounting the cash book is a chronological record of the receipts and payments transactions for a business. Select a petty cash custodian and petty cash cashier. It is a special book that will record only one type of transactions cash transactions. Mar 25, 2018 simple petty cashbook example solution 2.
These balances include savings and checking accounts. Thus, the book is part of a manual recordkeeping system. Petty cash means the small amount that is allocated for the purpose of paying the small expenses which the company occurs in its day to day operations where it is unreasonable to issue the check and for managing the same custodians are appointed by the company. 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. Most companies set up a special fund called a petty cash fund for small purchases and office expenditures.
Petty cash book is the cash book which involves small cash payment and receipt during daily business operation. Jan 08, 2015 this feature is not available right now. Jul 20, 2016 from the example, you can see that it was a contra entry, with a credit to our bank for giving out the cash and a debit to our cash account for receiving the cash. Since petty cash register does not form part of the double entry system, payments made through petty cash are subsequently posted into the cash ledger and the general ledger. This is a page of example transactions and gives you an idea of how it will look when you enter information into the cashbook. Petty cash book format example definition explanation. Click here to download simple cash book excel template. Head cashier may pay cash in the following methods.
The petty cash book is a formal summarization of petty cash expenditures, sorted by date. Let us learn about the petty cash book and the various systems of maintaining the said account. How to prepare petty cash bookpetty cash book in hindi with. After this, the owner possibly releases the cash from the cash book to the petty cash account and the transaction i. From the example, you can see that it was a contra entry, with a credit to our bank for giving out the cash and a debit to our cash account for receiving the cash. Click here to download all accounting excel templates for rs 199.
These are expenses which are incurred day after day. 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. The totals from each month appear in the totals page. Also included as a part of cash are the balances kept at banking and financial institutions. This video contains a solved example on petty cash book which will help you to understand the process of recording entries in cash book. For this purpose, a petty cashier is appointed by the chief cashier. Petty cash book explanation, format, example, ordinary and imprest. Journal entry for putting money into the petty cash fund. This petty cash log template allows you to easily modify the heading labels as needed and contains working formulas in the balance column in case you want to track the petty cash log using the spreadsheets itself, rather than printing a blank form.