What are the types of petty cash books? (2024)

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What are the types of petty cash books? ›

There are two types of petty cash books. They are: Columnar petty cash book. Imprest petty cash book.

Petty Cash Book is used for recording payment of petty expenses, which are of smaller denominations like postage, stationery, conveyance, refreshment, etc. Person who maintains petty cash book is known as petty cashier and these small expenses are termed as petty expenses.

Petty cash is a small amount of money a company keeps for small, incidental expenses. These minor payments include office supplies, stationery, meals, client lunch, stamps, etc. The number of petty cash funds could change depending on the organization's size.

However, on corporate financial statements, petty cash is listed in the "Cash and cash equivalents" section of the balance sheet.

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.

There are three common types of cash books: single column, double column, and triple column.

Single column cash book: Single column cash book is also called a simple cash book. It presents entries for cash received (receipts) on the left side or debit side and cash payments on the right hand side or credit side.

Since petty cash is a current asset, it is considered a debit on the firm's balance sheet. Therefore, when a company is allocating some funds to a petty cash account, the finance professional should write a check addressed to “petty cash” and cash it at the corporation's bank.

How to prepare a petty cash book? ›

Columnar petty cash book

The credit side has columns for all the cash expenses set in chronological order. The money that comes from the head accountant is recorded on the debit side. Every time an expense is made, it is recorded under its specific column. Everything is tracked in a sequence.

Petty cash funds should be properly secured at all times. Access to the funds should be restricted to one person (e.g., the petty cash custodian or a specified cashier). Cash on hand and receipts for disbursem*nts made should always equal the assigned amount of the petty cash fund.

A cash book differs from a cash account in that it is a separate ledger in which cash transactions are recorded, whereas a cash account is an account within a general ledger. There are three common types of cash books: single column, double column, and triple column.

DIFFERENCE BETWEEN SIMPLE AND ANALYTICAL PETTY CASH BOOK

Separate record of each kind of petty expenses is not maintained. The analysis columns are used for each commonly occurring item of expenses such as stationery, postage and travelling, etc. 2. It is written in the same manner as Cash Book is written.

Conclusion. Petty cash is defined as a small amount of money kept on hand by a business to cover minor expenses that arise during normal operations. A petty cash voucher is a simple form that is used to track petty cash fund disbursem*nts.

All the expense receipts of petty cash vouchers have to be signed by the cashier and the one receiving them. Petty cash funds decrease with every expense. This means that the total spend must be equal to the total amount allotted in the beginning. Only then will the petty cash book be approved by any auditor.