Petty cash book
The petty cash book is the book for recording small disbursement, the rational behind the system is to reduce the numerous cash payment for small expenses. The general system adopted for the recording of item in the petty cash book is refer to as ”the imprest system”in this system a specified sum is given to the petty cashier at the start of the accounting,this amount is called the”float”this amount should be sufficient to cover the estimated petty cash book expenditure for stated period. The petty cashier must be reimbursed at regular interval .
The petty cash book is a double entry book and must be included in the trail balance.the maximum level of cash held in the petty cash book is fixed and the cashier must be reimbursed for amount he has paid out.the source document for the petty cash book is the petty cash expenses voucher .
Advantages of petty cash book
- This risk of fraud will be eliminated
- The burden of the main cashier will be reduced.
Accounting Procedure
- Credit cash book with the cheque drawn on the main cash book. Debit petty cash book with the amount of float
- Credit petty cash book with payment made and analyze them
- All payment made out of the petty cash book must be supported by authorized vouchers.
- Analysis column must be totaled at intervals and the total transferred to their respective nominal ledger
- Reimburse the petty cash every week or month using the imprest system
Specification of petty cash book
Dr Cr
| Receipt | folio | Date | Details | Voucher no | Total | Sundry | Stationery expenses | Transport | Cleaning | Ledger |
