Different types of petty cash book

This requires additional labour and time, therefore businessmen do not use simple petty cash book in practice. Similarly, when cash is paid out the same is recorded on the credit or right hand side of the cash book. Difference between cash book and cash account with. Furthermore, keep a microsoft excel doc or other spreadsheets that tracks who spent what, when it was spent, and the total amount of spending for both the. It may be maintained by ordinary or by the imprest system. Cash book is periodically made up with the bank instructions as an internal method of inspecting. Some of the important types of documents used in accounting are as follows.

Balance bd indicates the amount brought forward from a previous accounting period being the excess of the diet or credit side over the other. Columnar petty cash book and its preparation process. The difference between cash on hand and petty cash boils down to where you keep the money and how you use it. A triple three column cash book to record cash, bank and purchase discount and sales discount. Petty cash book supplies information regarding petty payments made on different heads more easily and quickly. Petty cash belongs in your petty cash box or envelope. Petty cash book and types of petty cash book part 1 simple. Petty cash meaning, examples accounting for petty cash. Meaning, types and importance of petty cashbook srd law notes. 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. There are the two methods of preparing petty cash book i. Balance bd stands for balance brought down, while balance cd stands for balance carried down. This account is also known as an imprest account because it always carries the same balance, which means that anytime the cash box is checked, it should have cash or receipts equaling the petty cash fund amount.

Review your petty cash register before you replenish the petty cash fund. 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. 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. So, the book, wherein day to day petty expenses for a particular period of a business concern, are recorded in chronological order of dates is called petty cash book. This type of book is maintained just like a cash book.

Apr 26, 2020 the petty cash book is a formal summarization of petty cash expenditures, sorted by date. You may find out that certain types might apply to your business more effectively and so you can format your log the same way. How the imprest system of petty cash book works your. A petty cash is a cash book used to enter all small or petty expenses obtained. Petty cash book explanation, format, example, ordinary and. For recording cash sales and cash purchases, cash memos serve as source documents. This is like a summary of the cash and bank book and starts and ends with the cash and bank balances. In most cases, the petty cash book is an actual ledger book, rather than a computer record. Cash memo is a source document in which all transactions pertaining to cash sales. No receipt with the exception of money received from the chief cashier, however small it may be, is recorded in it.

To record such expenses, a different book known as a petty cash book is maintained. Petty cash book analytical or columnar part 2 in hindi for. 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 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. To get a clear picture of how it looks, go through the following format. The elements of a cash book can be understood as follows. It differs from the income and expenditure statement in that the income and expenditure statement does not show details of loans, sale of assets, recovery of staff advances etc. Notes on systems of petty cash fund grade 10 accountancy. Cash book explanations show your love for us by sharing our contents. Petty cash is easy to steal, so make sure you protect it. Petty cash procedures are established by businesses or other organizations to handle small amounts of cash. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. While in the debit side, discount allowed is recorded along with the receipts, either in cash or through cheque. Apart from the above three, one more type of cash book is maintained, known as the petty cash book used for recording petty cash expenses of the business. Here we detail about the three types of cash book, i.

There are four major types of cash book that companies usually maintain to account for their cash flows. A cash book has two sides, a receipt side or debit side and a payment side or credit side. The cash book is a chronological record of the receipts and payments transactions for a business. In an organization thousands of cash transactions occur in a year and journalizing them all is tedious work. This is an initial accounting system may contain two side method. Since the petty cash book analysis the expenses into a number of heads of.

What are the different types of petty cash procedures. In this video we will discuss what is petty cash book a subsidiary books in hindi for class 11th cbse icse and state boards and what are the different types of petty cash book i. Discount allowed and discount received are recorded in the discount column. 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.

The person who is responsible for the recording the receipts and the payments is known as the petty cashier. Thus, the book is part of a manual recordkeeping system. For recording transactions in the simple cash book, the foremost step is to understand. It is impractical and inconvenient for paying such petty expenses, like bus fair, cartage, and postage stamp through cheque. You should write a check to the custodian to initially establish the fund. Simple petty cash book in simple petty cash book there is one column each for recording of receipt of cash from the. These small expenditures are usually paid using coins and currency notes rather than checks. Balance the cash book and bring down the balances of cash in hand and at bank at the end of the period 2011. The fundamental difference between the main cash book and the petty cash book is that only petty expenses are recorded in the petty cash book. Cash book definition, example and format of cash book. 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.

A doubletwo column cash book to record cash as well as bank transactions. Petty cash book format example definition explanation. A petty cash book records small cash transactions in separate accounts. The petty cash book is a formal summarization of petty cash expenditures, sorted by date. It is a system of petty cash book where a person is given a fixed amount in the beginning of the period, the petty cashier submits the account of expenses keeping surplus amount himself. The cash book is the most important subsidiary book of any business concern. Second part is the cash gross journal which records all cash gross. The credit side consists of several analysis columns. A single column cash book to record only cash transactions. Jul 16, 2019 petty cash is easy to steal, so make sure you protect it. In a triple column cash book, there are three columns of amount namely, cash, bank and discount. Do occasional audits, checking to see that transactions are.

There are two primary types of entries in the petty cash book, which are a debit to record cash received. Petty cash book definition, types, format, examples. Types of cash book a cash book is further divided into different types. April 2 introduce n3,900 into the business as capital. 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. Cash book is a book of original entry in which transactions relating only to cash receipts and payments are recorded in detail. Naturally, every accounting ledger contains two sides, that may be credit and debit. Cash book is the account which keeps track of all the cash transactions of the business. Cash memo is a source document in which all transactions pertaining to cash sales or purchases are to be recorded. Sep 26, 2019 petty cash book is maintained to record small expenses such as postage, stationery, telegram.

First part is the cash outlay journal that records all cash payments, much as accounts collectable and budget items. For example, when you go to the college bookstore and write a check to pay for your honking big intermediate accounting textbook 1,600 pages, yikes. It is impractical and inconvenient for paying such petty expenses, like. 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 these are expenses which are incurred day after day.

The petty cash book will be maintained by a separate cashier known as petty cashier in the accounting field. Called a petty cash fund, this cash is used for making small purchases in lieu of writing a check or using a company credit card. Oct 15, 2018 the difference between cash on hand and petty cash boils down to where you keep the money and how you use it. 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. The larger firms generally divide the cash book into 2 parts. Petty cash book is maintained to record small expenses such as postage, stationery, telegram. In the company, the petty cash book is usually maintained by the administrative department of the company as the accounts departments are usually occupied by the larger business transactions and also the admin department is only responsible for such kind of expenses. A petty cash book to record small day to day cash expenditures. 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. The difference between petty cash and cash on hand bizfluent.

A government office required to pay different types of petty expenses daily. Types of books for accounts management in ngos funds for ngos. Jun 18, 2019 therefore such numerous business operations involving a minimal amount of transactions can be written down in a separate book called a petty cash book and the person responsible for maintaining it, is called a petty cashier. Basically, petty cash book is also containing the two sides, a credit side expenses and cash payments and a debit site cash. Because of the enormously large amount of cash transactions in a typical business, this cash account is maintained as a separate book known as cash book. Though you can make your own petty cash log template, learning about the different types can help you out immensely. 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. Apr 16, 2020 petty cash procedures are established by businesses or other organizations to handle small amounts of cash. It is a system of petty cash book where a person is given a fixed amount in the beginning of the period, the petty cashier submits the account of. The date of each transaction is recorded in this column. Separate duties, so the person who is recording transactions is different from the person putting the transactions into your accounting system. 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. 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.

Meaning, types and importance of petty cashbook srd law. These are expenses which are incurred day after day. The check amount should be sufficient to handle most cash purchases for the time period you choose, but not so large as to encourage theft. Petty cash book makes possible for making comparison of the petty expenses between two periods and helps in controlling such petty expenses more effectively. This article throws light upon the three main types of cash book that can be maintained in a farm business.

When money is withdrawn from the bank for office use. It records the daily transactions relating to receipts and payment of cash. Balance cd on the other land, is used to indicate the amount transferred from one side of the account or cashbook to the other side so as to effect a. Columnar petty cash book, and imprest petty cash book. Record the following transactions in a double column cash book of ezenwa and bros.

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. Dec 17, 2019 cash book in accounting the cash book is a chronological record of the receipts and payments transactions for a business. A double two column cash book to record cash as well as bank transactions. A separate column is allotted for each type of expenditure. This petty cash book is prepared on the same lines of the simple petty cash book. 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. Notes on petty cash book and petty cash fund other other.

A triplethree column cash book to record cash, bank and purchase discount and sales discount. Notes on petty cash book and petty cash fund other. Other types of cash may be kept in a drawer, a safe, a cash register or even in the bank if youre using the accounting definition of cash on hand, which measures your companys. Meaning of petty cash book, its importance and advantages. Read this article to learn about the following types of cash book and its preparation, i. Sales and purchases are the main features of any business enterprise. Simple cash book contains only one amount column on each side debit and credit for recording cash receipts and cash payments. Each entry in the petty cash book should include the date, the amount, and what was purchased with the petty cash. When cash is received it is entered on the debit or left hand side. When you sign it, you attest to the fact that you have funds in your checking account, allowing this check to immediately clear. Now that we know about the different kinds of cash book, we should go through the different formats of.

Jul 02, 2018 in this video we will discuss what is petty cash book a subsidiary books in hindi for class 11th cbse icse and state boards and what are the different types of petty cash book i. It differs from the income and expenditure statement in that the income and expenditure statement does not show details of. The format of simple petty cash book is as under ii. It is a special book that will record only one type of transactions cash transactions.

A company will assign a custodian whose job it is to make sure that all monies are accounted for through a receipt or other appropriate documentation. The format of a triple column cash book is given below. How the imprest system of petty cash book works your business. Once you have the basics covered, you need to put money into petty cash. Simple petty cash book is just like the main cash book. Petty cash book explanation, format, example, ordinary. What is a cash book definition, explanation and types. Nov 14, 2015 the cash book is the most important subsidiary book of any business concern. Keep the petty cash box in a secure location, known only to one or two people.