As the cash book lists bank payments & receipts, a petty cash book is needed to record actual cash transactions.

Voucher is a form which shows what a payment is for .

Imprest systems is a system by which a refund is made of the total paid out in a period.

A worked example of a petty cash book:

Step 1 Enter date and details of each payment .Put in the total column.Step 2 For step 1 also put the amount in the column for the type of expense.Step 3 At the end of each period,add up the totals columnStep 4 Now add up each of the expense columns. The total of Step 3 should equal the total of all the expense columnStep 5 Then balance off the petty cash book ,carrying down th

e petty cash in hand balance to the next period

For example: Write up a petty cash book,with analysis columns for office expenses,motor expenses ,cleaning expenses and casual labour.The c

ash float brought down is $600 and the amount spent is reimbursed on 28 Feb.Show the balance carried down to 1 March .

Year 8 $

Feb 1 Letterheadings 32

2 F.Lee-casual labour 15

2 Unique Motors- motor repairs 33

4 Petrol 27

5 Paper clips 10

8 Envelopes 12

9 Cleaning materials 15

11 C.Hop- casual labour 27

13 Mr.Ng-cleaner 21

16 Typewriter ribbons 24

18 Motor taxation 60

21 K.Kwan - casual labour 20

Also show how the items for motor expenses and office expenses would appear in the general ledger.

Petty Cash Book

Receipts Date Details Voucher Total Office Motor Cleaning Causel

No Exp exp Exp's Labour $ Year 8 $ $ $ $ $

600 Feb-01 Bank

1 Letterheading 1 32 322 F.Lee Causel Labour 2 15 152 Unipue Motors 3 33 334 Petorl 4 27 275 Paper clips 5 10 108 Envelopes 6 12 129 Cleaning materials 7 15 15

11 C.Hop-Causel Labour 8 27 2713 Mr.ng-cleaner 9 21 2116 Typerwriter ribbons 10 24 2418 Motor taxation 11 60 6021 K.kwan-Causel Labour 12 20 20

296 78 120 36 6228 Bal c/d 304

600 600296 Mar-01 Bal b/d

304 Bank

General Ledger Motor Expenses Year 8 $ Feb 28 Petty cash 120

Office expenses Year 8 $ Feb 28 Petty cash 78

Now you know how to prepare

a petty cash book ???

ExerciseYear 3 May 1 The cashier hands a cheque for$100 to the petty cashier to enable him to obtain cash for the starting float of petty cash $ 3 Stationery Voucher No. 1 5.6 5 Postage Voucher No. 2 8.7 8 Cleaning expenses Voucher No. 3 15.2 12 Payment of amount to K Sutton in the purchases ledger Voucher No. 4 27.4 17 Postage Voucher No. 5 6.3 20 S-Small- travel exp. Voucher No. 6 4.5 23 Stationery Voucher No. 7 3.2 25 Cleaning expenses Voucher No. 8 12.4 27 Telephone phone bill Voucher No.9 1.2

29 Postage Voucher No. 10 6.3

31 The cashier reimburses the petty cashier the amount paid out to date

Petty Cash Book Receipts Date Details Voucher Total Postage Stationery Travel Cleaning Ledger Ledger

No Exp's Folio Accounts $ Year 3 $ $ $ $ $ $

100 May-01 Bank3 Stationery 1 5.6 5.65 Postage 2 8.7 8.78 Cleaning 3 15.2 15.2

12 K Sutton 4 27.4 PL1 27.417 Postage 5 6.3 6.320 S Small- 6

travel 4.5 4.523 Stationery 7 3.2 3.225 Cleaning 8 12.4 12.4

1.2 27 Telepone

29 Postage 10 6.3 6.689.6 21.3 8.8 4.5 27.6 27.4

31 Bal c/d 11.6 GL 1 GL 2 GL 3 GL 4

101.2 101.2

11.6 Bal b/d

88.4 Bank

Postage

Year 3 $

May 31 Petty cash 21.3

Stationery

Year 3 $

May 31 petty cash 8.8

Travel Exp.

Year 3 $

May 31 Petty Cash 4.5

Cleaning

Year 3 $

May 31 Petty Cash 27.6

General Ledger

Bank

Year 3 $

May 1 Petty Cash 100

Jun 1 Petty Cash 88.6

K Sutton

Year 3 $

May 31 Petty Cash 27.4

General Ledger

Purchases Ledger

Revision Notes

• The petty cash book saves 1) the main cash book 2)the ledger accounts from containing a lot of trivial details

• The use of the petty cash book enables the chief cashier to delegate this type of work to a more junior member of staff

• Under 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.