Question: What Are The Features Of Petty Cash Book?

How do you balance a petty cash book?

Reconcile the balance compared to the activity at the end of each accounting period, or more often if your petty cash fund has more frequent activity.Identify the ending balance of the account as of the last reconciliation.

Count the total funds left in the petty cash account at the end of the period.More items….

What is petty cash book and its advantages?

The main advantages are: Reduction in numbers of transactions: Many expenses of small nature recorded in petty cash book, the number of transactions is reduced in the cash. Reduction of errors: As head cashier check the accounts of previous month and gives advance for the coming month, does, errors if any are reduced.

What is cash book format?

In this Cash Book three amount columns are maintained on both the debit and credit sides—the first column is for discount, the second for cash and the third for bank. Single Column Cash Book: This format of Cash Book is useful when either there is no bank transaction or bank transactions do not occur frequently.

What are the three types of cash book?

There are three common versions of the cash book: single column, double column, and triple column. The single-column cash book shows only receipts and payments of cash. The double-column cash book shows cash receipts and payments as well as details about bank transactions.

What are the features of cash book?

The main features of the cash book are as under:(i) Records Only Cash and Bank Transactions:(ii) Transactions are Recorded in the Chronological Order:(iii) Cash Column cannot have Credit Balance:(iv) Similar to Journal:(v) Similar to Ledger:(v) Journal and Ledger Both:More items…

What is petty cash book how it is prepared?

A petty cash book is a ledger kept with the petty cash fund to record amounts that are added to or subtracted from its balance. Petty cash should be part of an overall business accounting system that documents how your business moves funds between one account and another and how it spends its money.

What is the importance of petty cash book?

A petty cash book is created to facilitate small payments in a business or organization. It caters for items such as postage and stamps, bus fare and stationery. It is meant to meet the day-to-day expenses and is entrusted in the hands of a petty cashier.

What is petty cash book what are its features?

The petty cash book is a formal summarization of petty cash expenditures, sorted by date. In most cases, the petty cash book is an actual ledger book, rather than a computer record. Thus, the book is part of a manual record-keeping system.

How a petty cash book looks like?

Like a general cash book, a petty cash book has a debit and a credit side. All receipts are recorded on the debit side and all payments are recorded on the credit side of petty cash book by the petty cashier.

What is petty cash example?

The small amount of cash that a company considers petty will vary, with many companies keeping between $50 and $200 as a petty cash fund. Examples of transactions that a petty cash fund is used for include: Office supplies. Cards for customers.

How do you solve petty cash?

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). Subtract this amount from the calculated amount of cash withdrawn. The result should be zero. If there is a residual balance, then there is a cash overage in the fund.

What are the types of petty cash book?

Petty cash book is of two types:Columnar petty cash book, and.Imprest petty cash book.

What is petty cash book?

The petty cash book is a recordation of petty cash expenditures, sorted by date. In most cases, the petty cash book is an actual ledger book, rather than a computer record. … This format is an excellent way to monitor the current amount of petty cash remaining on hand.

Is petty cash an expense or income?

Petty Cash Account Type The journal entry on the balance sheet should list a debit to the business bank account and a credit to the petty cash account. When petty cash is used for business expenses, the appropriate expense account — such as office supplies or employee reimbursement — should be expensed.

What are the uses of cash book?

A cash book, or petty cash log, is a ledger for keeping track of small cash purchases. Some small businesses such as restaurants find cash books especially useful because these companies tend to need small quantities of easily available supplies to make up for unpredictable shortfalls.

What is cash book why it is prepared?

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. However, if there are any discount or cheque transactions, it is recorded in a separate account in the ledger.

What are the five main heads of expenses in a petty cash book?

Details entered in the various columns of the petty cash book are as follows: Receipts. This is the first column of the petty cash book. … Cash Book Folio Number (C.B.F.N.) … Date. … Particulars. … Voucher Number (V.N.) … Total. … Postage. … Stationery.More items…•

When petty cash book is kept there will be?

A s the petty cashier has to produce to the chief cashier the petty cash book for inspection, it acts as a healthy check on the petty cashier. As the petty cashier has to account for his expenses, before he can draw further sums, the petty cash book remains up to date.