Analytical petty cash book formatspecimen of analytical petty cash book. For this purpose, a petty cashier is appointed by the chief cashier. Petty cash, also known as cash on hand, refers to small amounts of cash kept on hand in a business. This type of cash book usually uses the imprest system. To pay for small purchases which require cash, such as food for the office lunch or coffee supplies, or for parking. This type of cash book will allow managementproprietors to tell at a glance the total amount spent on each of these common expenses. Three column cash book analytical petty cash book the imprest system of betty cash posting petty cash to the ledger looking forward for your assistance.
An analytical petty cash book is employed by a large concern having a number of transactions of petty amount such petty. Jan 16, 2018 revised cash book with bank reconciliation statement, this video will help you to understand the process of preparing revised or adjusted cash book. Analytical petty cash book simple petty cash book cash received by the petty cashier is recorded on debit side and all payments for petty expenses are recorded on credit side in one column. These small expenditures are usually paid using coins and currency notes rather than checks. 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. Recording of transactions in a petty cash book is easy. Separate account records are maintained for petty cash, accounts payable and receivable, and other relevant transactions such as inventory. Staff refreshments for sales meetings are generally paid for from petty cash. Recording of transactions ii petty cash book solutions this page contains the cbse accountancy class 11 chapter recording of transactions ii notes. Cash book is regularly reconciled with the bank statements as an internal auditing measure. 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. Importance and advantages of petty cash book business performing a large number of petty transactions usually maintain a separate petty cash book.
Petty cash book definition the petty cash book is a recordation of petty cash expenditures, sorted by date. In this book, separate columns are provided for usual head of expenditure. In a business a number of small payments, such as for stationery, telegrams, taxi fare, cartage etc have to be. Cash book is a book of original entry in which transactions relating only to cash receipts and payments are recorded in detail. Prepare an analytical petty cash book from the following information provided by mr. How to prepare petty cash bookpetty cash book in hindi. One major advantage of this analytical system is that it saves time.
Subtract this amount from the calculated amount of cash withdrawn. A three column cash book or treble column cash book is one in which there are three columns on each side debit and credit side. It is another cash book which is maintained, generally, in large business. Petty cash book is a ledger book, which is used to record petty cash expenses formally in chronological order, with the date. In module 12, which covered the bank cash book, the advantages of paying all cash and cheques into the bank intact were evident. These are expenses which are incurred day after day. Petty cash is the small cash reserves that businesses keep on the. In the analytical version, a separate column is used for. 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. Sep 17, 20 every payment is entered in the concerned head of petty expense and in total column. Cash book definition, example and format of cash book. Recording of transactions ii petty cash book solutions. General cash book is subdivided in the single column, double column, and treble column cash book.
Petty cash book is a ledger book, which is used to record petty cash. Journal in which all cash receipts and payments including bank deposits and withdrawals are recorded first, in chronological order, for posting to general ledger. Meaning, types and importance of petty cashbook srd law notes. Let us learn about the petty cash book and the various systems of maintaining the said account. The petty cash book is to enter how the cash available for daily expenses are spent for example milk, tea, taxi charges and. If person receiving the petty cash and the person giving out. The petty cashier of john and james company paid cash for the following expenditures during march 2018. 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. One of the total payment column and second in one of the analytical amount columns. This petty cash book is prepared on the same lines of the simple petty cash book. Revisedadjusted cash book with bank reconciliation statement. 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. Petty cash book is a formal book of recording petty expenses which are incurred in cash. The amount paid out by the chief cashier is credited in his cash book to complete the double entry.
Petty cash book format example definition explanation. Enter the transaction on the debit or credit side and it will automatically calculate the cash on hand for you. If there is a residual balance, then there is a cash overage in the fund. 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. In larger firms, it is commonly divided into two parts. 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. In this column, the date of receiptpayment of cash is recorded. The main advantages of petty cash book publish your article. The petty cash book is a book of vouchers which are made each time an expense is made from petty cash money. In an analytical petty cash book, there exists separate heads for different petty expenses, which makes recording much easier. You can find the questionsanswerssolutions for the chapter 4 of cbse class 11 accountancy in this page. Meaning, types and importance of petty cashbook srd law. Analytical petty cash book is a book in which there is only one amount column on the debit side and a number of columns on the credit side for different heads of expenses. Most companies set up a special fund called a petty cash fund for small purchases and office expenditures.
When a trader keeps a bank account it becomes necessary to record the. All petty payments are to be classified into different heads and different columns are maintained. The credit side consists of several analysis columns. A petty cash is a cash book used to enter all small or petty expenses obtained. All the payments made are analyzed in the column of petty cash book itself, under the different heads of expenses. Analytical cash book class 11 accountancy cash book by anjali is an online education portal that provides interactive study material for students of. In a business operating this type of cash book, small cash payments are usually made out of petty cash. Sep 30, 2018 petty cash book is a formal book of recording petty expenses which are incurred in cash. In most cases, the petty cash book is an actual ledger book, rather than a computer record.
Similarly, when cash is paid out the same is recorded on the credit or right hand side of the cash book. The only difference is that the payments side ruled into suitable column for recording expenses that are repetitive in nature. 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. The most common way of accounting for petty cash expenditures is to use the imprest system. Head cashier may pay cash in the following methods. 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. Petty cash is a small reserve of cash kept onsite at a business location for incidental cash needs. As in the case of any other cash book, petty cash book also has the debit side and the credit side. The imprest system is designed to provide a rudimentary manual method for tracking petty cash balances and how cash is being used. In such a cash book there are preexisting columns for the usual expenses that recur quite frequently for an organization. Advantages and disadvantages of analytical petty cash book.
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. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. Petty cash book explanation, format, example, ordinary. Petty cash book definition of petty cash book by the. Analytical cash book class 11 accountancy cash book. Describe what a petty cash fund is by completing the following sentence. 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.
These small cash payments are recorded in a separate book, known as a petty cash book. Ncert solutions for class 11 financial accounting recording. A petty cashier makes a detailed analysis of petty payments and records under suitable heads, i. Meaning of petty cash book a petty cash book is one in which all petty or small payments made through petty cash fund are recorded systematically. It is the most advantageous method of recording petty cash payments. In big business apprehensions, the petty cash book is maintained in analytical form, with a detach column for each standard item of expense and a column for total. Considered as the most beneficial method of recording petty cash payments. When cash is received it is entered on the debit or left hand side. For this purpose, a petty cashier is appointed by the firm, to pay for small payments usually below rs. This kind of petty cash book is known as analytical petty cash book.
A cash book is that unique book of accounts which fulfils the objective of both, a journal and a ledger. When a petty cashier needs money, he is given a cheque by the main 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, because of the inconvenience and costs of writing, signing, and then cashing the cheque. Many expenses of small nature are recorded in petty cash book. Petty cash book definition, types, format, examples imprest and. Cash book, types of cash book, petty cash book, problem. A small fund of money for incidental expenses, as in an office. The sum expended by petty cashier is reimbursed, thus making up the balance to the original sum. When your organization has an actual book for petty expenses. A petty cash book is a record of smallvalue purchases before they are later transferred to the ledger and final accounts. Companies normally maintain a petty cash fund to pay for small, miscellaneous expenditures. In large business concerns, the petty cash book is maintained in columnar or analytical form, with a separate column for each usual item of expense and a column for total. So if an organization has daily expenses for food, stationery, postage, etc.
The primary bookkeeping record in singleentry bookkeeping is the cash book, which is similar to a checking account register in uk. The amount of petty cash also known as the petty cash fund varies by company or organization. There are two types of petty cash book one is simple and another one is analytical petty cash book. The petty cash book will be maintained by a separate cashier known as petty cashier in the accounting field. Petty cash book meaning, cash book vs petty cash book. The keeping of the book is not different from the keeping of the main cash book. In this type, a separate column for each petty expense is provided on credit side. Cash book contains cash transactions passing into and out of a business. This type of petty cash book is known as analytical petty cash book. An imprest system of petty cash means that the general ledger account petty cash will remain dormant at a constant amount. This system is maintained for the purpose of control of petty cash. 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.
One is used to record cash transactions, the second is used to record bank transactions and third is used to record discount received and paid. To analyzing the individual payments you have to just total individual expenses columns. As only totals of various columns are to be posted in the. This book records all those expenses which are small in amount and which are incurred on regular basis. The advantages of analytical petty cash book are given below. It also acts as a subsidiary book to post all the cash transactions, similar to a cash. Petty cashier is a person, who maintains the petty cash book. It also saves time posting each item of petty payments unnecessarily in the ledger. 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.
The analytical petty cash book and the imprest system. As head cashier checks the accounts of previous month and gives advance for the coming month, thus, errors if any are reduced. Like a journal, it is the first book which records all the cash transactions of the business. Petty cash definition of petty cash by the free dictionary. A column for sundries is usually added for miscellaneous payments. The analytical cash book is a book kept by a petty cashier. 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. In large business concerns, the petty cash book is maintained in columnar or analytical form, with a separate column for. Analytical and imprest system of petty cash book your article library. The person who maintains the main cash book and advance money to petty cashier to meet petty expenses is the main or head cashier. Recording of transactions ii petty cash book solutions this page contains the cbse. 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. Definition of petty cash petty cash refers to a small amount of currency and coins that a company uses to pay small amounts without writing a check. The imprest petty cash system is a method of accounting for petty cash expenses.
Petty cash book is maintained by the petty cashier. A simple petty cash book is one in which there is one common column for date and particulars, for both the receipts and payments. At the end of the period a petty cash reconciliation is carried out. When petty cash is easy to get to employees, it is a suitable way to pay for little purchases. One major advantage of this system is that it saves time. Nov 04, 2015 simple petty cash book analytical petty cash book types of petty cash book 5. Always the voucher would show the amount, purpose, recipient, general ledger account number and date relating to the expenses. Like columnar petty cash book, it also contains many money columns in the credit side and one money column in the debit side and a particular column and a date column are also similar to that of the columnar or analytical petty cash book.
In other words, we can say that if we add a bank column to both sides of a single column cash book, it would become a double column cash book. Also, pass a journal entry and post them to their respective ledger. Petty cash is a comprehensible and common method of paying for business operating cost. Petty cash book explanation, format, example, ordinary and. Meaning of petty cash book, its importance and advantages. Petty cash book is a part of accounting cycle it is prepaid for the normal daiy expenditres of the organization. At the end of the month petty cash book receipt and payment column is totaled and balanced here total payments are balance cd i. This book records all those expenses which are small in. How to prepare petty cash bookpetty cash book in hindi with. Cash book contains individual columns for each expense every small payment is recorded on the credit side.
The imprest system is an accounting system for paying out and subsequently replenishing petty cash. Petty cash definition and meaning collins english dictionary. Thus, the book is part of a manual recordkeeping system. Double column cash book explanation, format, example. Define what liquidity means by completing the following sentence. Petty cash book can be maintained either in a simple or in analytical way. The credit side is bigger and thus has many columns. A petty cash log is a document to record all the important financial information. 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. Petty cash is money that is kept in the office of a company, for making small payments in cash when necessary.
Companies use these funds to buy small items like office supplies and postage instead of going through the hassle of writing a check for. The analytical petty cash book the analytical cash book is a book kept by a petty cashier. How the imprest system of petty cash book works your business. Add up the total expenditure listed on each petty cash voucher in the petty cash fund the information can also come from the petty cash book. Record the following transactions in an analytical petty cash book for the month of january 2019. Read this article to learn about the following types of cash book and its preparation, i. Jul, 2019 the imprest system is an accounting system for paying out and subsequently replenishing petty cash. The person who maintains the petty cash book is known as petty cashier. Download cash book excel template 5 types of cash book templates with predefined formulas to help you record routine cash transactions of a company regularly. Recording in a petty cash book does not require formal knowledge of accounting principles and techniques. When petty expense is recorded in total payment column, the same amount is recorded in the relevant petty expense column. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. Petty cash book definition, types, format, examples.
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