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 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..

Once the list of transactions from the petty cash custodian is complete, the accounting clerk will confirm that a receipt is present for each transaction, and that expenditures are properly added to calculate the sum. Petty cash is easy to steal, so make sure you protect it: Separate duties, so the person who is recording transactions is different from the person putting the transactions into your accounting system. Petty cash or a petty cash fund is a small amount of money available for paying small expenses without writing a check. Petty Cash is also the title of the general ledger current asset account that reports the amount of the company's petty cash.

Petty Cash Recording Method Petty cash holders make requests to cash treasurers; They prepare a list of expenditures that have been enclosed with proof of transaction on its expenditures.

Keep the petty cash box in a secure location, known only to one or two people. The most common way of accounting for petty cash expenditures is to use the imprest system.

Definition of Petty Cash. 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. The cash treasurer gives a sign of approval to the request form; The cash treasurer gives the fund the amount of petty cash amount that has been issued. The amount of petty cash will vary by company and may be in the range of $30 to $300. What is petty cash? He should then sort each receipt into the appropriate expense category and total the expenditure for each category.