2 What is petty cash book ?As the cash book lists bank payments & receipts, a petty cash book is needed to record actual cash transactions.
3 Voucher is a form which shows what a payment is for .
4 Imprest systemImprest systems is a system by which a refund is made of the total paid out in a period.
5 A worked example of a petty cash book: Step Enter date and details of each payment .Put in thetotal column.Step For step 1 also put the amount in the column for thetype of expense.Step At the end of each period,add up the totals columnStep Now add up each of the expense columns. The totalof Step 3 should equal the total of all the expensecolumnStep Then balance off the petty cash book ,carrying down the petty cash in hand balance to the next period
6 For example:Write up a petty cash book,with analysis columns for office expenses,motor expenses ,cleaning expenses and casual labour.The cash float brought down is $600 and the amount spent is reimbursed on 28 Feb.Show the balance carried down to 1 March .Year $Feb 1 Letterheadings2 F.Lee-casual labour2 Unique Motors- motor repairs4 Petrol5 Paper clips8 Envelopes9 Cleaning materials11 C.Hop- casual labour13 Mr.Ng-cleaner16 Typewriter ribbons18 Motor taxation21 K.Kwan - casual labourAlso show how the items for motor expenses and office expenses would appear in the general ledger.
8 General Ledger Motor Expenses Year 8 $ Year 8 $ Feb 28 Petty cash 120 Office expensesYear $Feb Petty cash
9 Now you know how to prepare a petty cash book ??? Let's try try !!!!
10 Exercise 29 Postage Voucher No. 10 6.3 Year 3May The cashier hands a cheque for$100 to the pettycashier to enable him to obtain cash for thestarting float of petty cash $3 Stationery Voucher No5 Postage Voucher No8 Cleaning expenses Voucher No12 Payment of amount to K Sutton in thepurchases ledger Voucher No17 Postage Voucher No20 S-Small- travel exp Voucher No23 Stationery Voucher No25 Cleaning expenses Voucher No27 Telephone phone bill Voucher No29 Postage Voucher No31 The cashier reimburses the petty cashier the amount paid out to date
12 General Ledger Postage Year 3 $ May 31 Petty cash 21.3 Stationery Travel Exp.Year $May 31 Petty Cash 4.5CleaningMay 31 Petty Cash
13 General Ledger Purchases Ledger Bank Year 3 $ May 1 Petty Cash 100 Jun Petty CashK SuttonYear $May 31 Petty CashPurchases Ledger
14 Revision NotesThe petty cash book saves 1) the main cash book 2)the ledger accounts from containing a lot of trivial detailsThe use of the petty cash book enables the chief cashier to delegate this type of work to a more junior member of staffUnder the imprest system,at the end of a period ,the cashier reimburses the petty cashier the amount spent in the that period ,so as to make up the cash float.