Principles of Accounting: Petty Cash Book.


Petty cash is used to record petty payments of cash regarding minor expenses such as Postage, bus fare, stationery, entertainment

Balance n petty cash book is balanced off on weekly or monthly basis and totals of different expenses in the petty cash book are debited in the ledger into respective account.

Petty cash book is ruled in such a way that, there are different columns on the credit side of the book, The main column is used to record Total amount and the same amount is also recorded into a specific column depending on the nature of expenses.

Petty cash book containing different columns is called analytical or columnar petty cash book. Columns are used to record different types of expenses.

Payments appearing on petty cash books are supported by petty cash vouchers. Vouchers show the title of expenses, Amount paid and date of payment . They are signed by the person receiving the money and then later on approved by an authorized person in the organization.

Petty cash is a book of Original entry as well as ledger

Double entry is made as under

  1. Cheque paid to petty cashies

DR: petty cash book.

CR: bank account in general cash book.

  1. Cash paid by petty cashier.

DR: respective expenses account in the ledger.

CR: Petty cash book.


A specific amount is given to petty cashier to meet basic requirements. Amount spent by petty cashier is reversed to him at the start of the next period in such a way that he will have cash in hand equal to the amount he had at the beginning of the period. This system is refered to as imprest system.

*Imprest is a cash float from which disbursements are made and which is periodically restored to its original amount.


One thought on “EDUCATION 101: PETTY CASH BOOK.

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