Petty Cash Book

Petty Cash Book is used to record all cash payments that involved very small amount, such as stationary, postage and so on. The entry in the Peety Cash Book will be posted to the respective ledger.

Why we need a the special Petty Cash Book ?

1. It's not practical to make all payment with checque.
2. Reduce entry in the cash book, especially for the small amount

All payment recorded in the Petty Cash Book should have a payment voucher as the support document.

One lump sum amount of money will be transferred to the Petty Cash Account. Petty Cash Account clerk will pay all the small amout transaction with the money in the Petty Cash Accunt. At certain interval, money will be transferred to the Petty Cash Account to replenish the cash that has been used. Thus, the Petty Cash Account will have a huge amount of money at the beginning of a period and slowwly deplenish over time. When the money in the Petty Cash Account is low, then money will be transferred to the Petty Cash Acocunt again.