Petty Cash Book – The cash book as seen above is used for recording all major payments. But, in every business a number of petty (small) Payment like that for postage, carriage, stationery, entertainment, cartage, conveyance etc. are paid frequently even in a single day. If all these petty expenses are to be recorded in the main cash book. It would be come too bulky and difficult to handle therefore, it is usual for the business units to maintain a separate cash book to record small payments only. Such a cash book is known as petty-cash book. Petty cash book can be of two types.
- a) Simple petty cash book and
- b) Analytical petty cash-book.
1.) SIMPLE PETTY CASH BOOK:- A simple petty-cash book is written just like the cash book. The amount received by the petty cashier from the head cashier is recorded on the debit side of the petty-cash book and payment on the credit side of the petty cash-book. Expenses account is individually debited in the ledger.
2.) AN ANALYTICAL PETTY CASH BOOK:- An Analytical petty cash book is employed by a large concern having a number of transactions of petty amount such petty. Cash book contains individual columns for each expense every small payment is recorded on the credit side. One of the total payment column and second in one of the analytical amount columns. The periodic total of expenses column is posted to the expenses accounts concerned while the total of expenses column is posted to the expenses accounts. Concerned while the total of payment column serves to find out the balance of cash with the petty cashier.