As head cashier checks the accounts of previous month and gives advance for the coming month, thus, errors if any are reduced. In this type, a separate column for each petty expense is provided on credit side. Petty cash book is maintained by the petty cashier. There might be a petty cash drawer or box in each department for. The imprest system is an accounting system for paying out and subsequently replenishing petty cash. Periodically, different nominal accounts are debited and the petty cash account is credited in ledger for expenses recorded in petty cash book.
The credit side is bigger and thus has many columns. Petty cash book is a cash book in which the petty cashier records petty cash expenses. Analytical petty cash book is a book in which there is only one amount column on. Petty cash book elearning, etutoring, school education support. These petty cash expenses are recorded in the petty cash book. The keeping of the book is not different from the keeping of the main cash book. Meaning of petty cash book, its importance and advantages. 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. Petty cash book is a ledger book, which is used to record petty cash expenses formally in chronological order, with the date. One of the total payment column and second in one of the analytical amount columns. 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. Petty cash book 2019, imprest system of petty cash.
Analytical cash book class 11 accountancy cash book by anjali is an online education portal that provides interactive study material for students of. 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. General cash book is subdivided in the single column, double column, and treble column cash book. Meaning, types and importance of petty cashbook srd law. 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. Also, pass a journal entry and post them to their respective ledger. The amount paid out by the chief cashier is credited in his cash book to complete the double entry. Under the system, the petty cash fund balance is always maintained at a fixed amount decided on when the fund is first established during an accounting period petty cash is used to pay cash expenses which are supported by petty cash vouchers. In large business houses, the cashier has to handle every day a large number of receipts and payments and if in addition to this he is further saddled with petty cash payments, his position becomes embarrassing. Petty expenses are recorded in petty cash book in chronological order of dates instead of the cash book. Analytical petty cash book or columnar petty cash book is different from the simple petty cash book in the sense that in this type of petty cash book, an analytical presentation of cash payment is made. Analytical petty cash book considered as the most beneficial method of recording petty cash payments. This kind of petty cash book is known as analytical petty cash book. Also, it will facilitate the accountant or the organization to evaluate the expenses under the dissimilar various heads.
It is also called as analytical petty cash book, as it analysis the payments under different heads separately. A petty cashier makes a detailed analysis of petty payments and records under suitable heads, i. 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. At the end of the period a petty cash reconciliation is carried out. Petty cash book is a formal book of recording petty expenses which are incurred in cash. As the petty expenses are recorded by petty cashier hence the labor. Petty cashier is a person, who maintains the petty cash book. The analytical cash book is a book kept by a petty cashier.
The petty cash book is maintained by separate cashier known as petty cashier. Petty cash is a small amount of discretionary funds in the form of cash used for expenditures where it is not sensible to make any disbursement by cheque. The credit side consists of several analysis columns. Get all questions and answers of recording of transactions ii petty cash.
As in the case of any other cash book, petty cash book also has the debit side and the credit side. Ordinary system imprest system in this system petty cashier is given appropriate amount of cash after spending the whole of that amount the submits the account to the head cashier this is the system of paying advance in the beginning. This book records all those expenses which are small in amount and which are incurred on regular basis. A petty cash book can either be a simple petty cash book or an analytical petty 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. An analytical petty cash book is one in which there is one amount column on its debit side and a number of columns on its credit side for different heads of expenses. Imprest system under this system management estimates the expenditure roughly for a period of week or month. It also saves time posting each item of petty payments unnecessarily in the ledger. You can find the questionsanswerssolutions for the chapter 4 of cbse class 11 accountancy in this page. The imprest system is designed to provide a rudimentary manual method for tracking petty cash balances and how cash is being used.
The receipt column is used to record the opening balance. The main advantage of the analytical system is that it saves time. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the daytoday normal. Entries are needed to 1 establish the fund, 2 increase or decrease the. Petty cash is maintained on the basis of imprest system. Petty cash book definition, types, format, examples imprest and. Thus, the book is part of a manual recordkeeping system. Petty cash book is the accounting book that is used for the purpose of recording the petty cash expenditure i. When petty expense is recorded in total payment column, the same amount is recorded in the relevant petty expense column. Also, it will facilitate the accountant or the organization to evaluate the expenses. Petty cash book is a cash book in which the petty cashier records petty cash. The only difference is that the payments side ruled into suitable column for recording expenses that are repetitive in nature.
The format of the analytical petty cash book is as under. In large business concerns, the petty cash book is maintained in columnar or analytical form, with a separate column for each usual item of. These small cash payments are recorded in a separate book, known as a petty cash book. Uses of petty cash book its a cash book used to enter daily petty expenses. 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. The employee, who keeps the petty cash book, is called petty cashier. Petty cash book free doubts and solutions topperlearning. Petty cash book definition of petty cash book by the. The imprest petty cash system is a method of accounting for petty cash expenses. On 21st january, 20 the petty cashier had with him rs. In module 12, which covered the bank cash book, the advantages of paying all cash and cheques into the bank intact were evident. The debit side is smaller and has very infrequent entries because cash receipt by the petty cashier is mainly from the cashier at the beginning or close of a specified period. Advantages and disadvantages of analytical petty cash book qs.
This type of petty cash book is known as analytical petty cash book. This kind enables the businessman to know the information about the amount being spent on each head of petty expense. Recording of transactions ii petty cash book solutions. In a business operating this type of cash book, small cash payments are usually made out of petty cash. Petty cash implies a small amount of cash in hand, with the petty cashier.
The analytical petty cash book and the imprest system. As only totals of various columns are to be posted in the. An analytical petty cash book is employed by a large concern having a number of transactions of petty amount such petty. These small expenditures are usually paid using coins and currency notes rather than checks. Entries are needed to 1 establish the fund, 2 increase or decrease the balance of the fund. Many expenses of small nature are recorded in petty cash book.
There are two primary types of entries in the petty cash book, which are a debit to record cash received. 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. In most cases, the petty cash book is an actual ledger book, rather than a computer record. This petty cash book is prepared on the same lines of the simple petty cash book. Cash posting profiles define postings to the general ledger. 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. Prepare an analytical petty cash book from the following information. Petty cash book definition, types, format, examples. Petty cash book can be maintained either in a simple or in analytical way. Payments in cash of small amounts like traveling expenses, postage, carriage etc.
Petty cash for eastern europe and russia finance dynamics 365. Petty cash book template excel software accountant. This topic provides information about the petty cash functionality that lets users in estonia. This type of cash book will allow managementproprietors to tell at a glance the total amount spent on each of these common expenses. Define the purpose and use of a petty cash fund, and prepare. Other than the normal petty cash book, which resembles a normal cash book, there are two other types of petty cash books. Analytical cash book class 11 accountancy cash book.
All petty payments are to be classified into different heads and different columns are maintained. What has probably happened in this scenario is we credit the petty cash e. One major advantage of this system is that it saves time. The sum of money so kept in hand generally termed as petty cash and book in which the petty cash expenditures are recorded is termed as petty cash book. Petty cash accounts are managed through a series of journal entries.
Petty cash book with imprest system simple and tabular. Just as in the main cash book, all payments are credited in the petty cash book. The main advantages of petty cash book publish your article. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal labor etc. Cash book contains individual columns for each expense every small payment is recorded on the credit side. Petty cash book meaning, cash book vs petty cash book. In the other example, if an entry is a debit in the cash book, our asset has increased bank and therefore we have received money from somewhere. Petty cash book explanation, format, example, ordinary. In big business apprehensions, the petty cash book is maintained in analytical form, with a detached column for each standard item of expense and a column for. An imprest system of petty cash means that the general ledger account petty cash will remain dormant at a constant amount. The petty cash book is a formal summarization of petty cash expenditures, sorted by date. 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. Cash book contains cash transactions passing into and out of a business. In this book, separate columns are provided for usual head of expenditure.
But this one will be able to know which items of petty expenses need to be controlled. Generally petty cash book is maintained on imprest system. Petty cash book format example definition explanation. The firm may adopt imprest system of maintaining petty cash. How to prepare petty cash bookpetty cash book in hindi. Importance and advantages of petty cash book business performing a large number of petty transactions usually maintain a separate petty cash book. In such a cash book there are preexisting columns for the usual expenses that recur quite frequently for an organization. Petty cash is a small reserve of cash kept onsite at a business location for incidental cash needs. For this purpose, a petty cashier is appointed by the firm, to pay for small payments usually below rs. Article shared by while recording the transactions in petty cash book if all the expenses are analyzed and entries are recorded in cash book on the basis of this analysis such petty cash book is called analytical petty cash book. Head cashier will give the petty cashier the estimated amount to start with. Recording of transactions ii petty cash book solutions this page contains the cbse accountancy class 11 chapter recording of transactions ii notes. The simple petty cash book has only two amount columns. It is the most advantageous method of recording petty cash payments.
888 1563 325 1125 463 1146 91 218 1464 356 642 797 579 1452 1045 826 908 1378 89 518 1341 313 307 794 733 653 903 1236 685 946 1237 1270