What is Petty cash book?
The cash book which is used to record petty or small expenses of cash is called petty cash book.Itrecords all type of small financial or monetary transaction records through cash.
Petty cash book is 2 types –
1.Simple petty cash book:
The petty cash book which is maintained by small organisation where petty expenses or transactions are few is called simple petty cash book.Under this all the petty cash receive are recorded in received column and all the petty expenses are recorded in payment side or column.
2.Analytical petty cash book:
The petty cash book which is maintain by large organisations is known as analytical petty cash book.Under this all the petty expenses are recorded separately under their particular head.It enables to find out total amount paid under a particular head of organisation.
Advantages of petty cash book:
i.Simple method
Petty cash book is maintained by the petty cashier. The person who records the small information about cash transactions is known as petty cashier. It is simple to use and operated by cashier.
ii.Time Saving:
Another advantage of petty cash book is it provide time saving facility to the organisation. Petty cashier records all the cash or small expenses in simple manner.
iii.Efficient Control:
Another important advantages of petty cash book is it provide the organisation to exercise a better control over the petty expenses.
iv.convenient handling:
Petty cash book is convenient to handling for the petty cashier of the enterprise.Petty cash book is better to use for the cashier because their is no need of accounting principles or techniques.
System of petty cash book:
There are two systems present or for maintaining petty cash book.
i.Ordinary system of petty cash book
ii.Impress system of petty cash book
i.Ordinary system of petty cash book
The system of petty cash where a lump sum of money is paid to petty cashier to meet all petty expenses of a particular period is called ordinary systems of petty cash book.
After the end of that period the petty cashier submitted the updated petty cash book.Before the chief cashier to determine the petty cash requirement for next period.
ii.Impress system of petty cash book:
The system of petty cash where an estimated amount is paid to petty cashier to meet petty expenses is called impress system of petty cash.
The specific amount paid to petty cashier under impress system is known as imprest cash.All the petty expenses incurred during a balancing period are met out of this imprest cash or money paid by chief cashier to petty cashier.
Advantages of impress system:
For the sake of clarification some of the most important advantages of impress system are discussed below.Impress system of petty cash is very popular due to the following advantages.
i.Effective control over petty expenses:
This system of petty cash enables the organisation to exercise a better control over the petty expenses to be incurred during a period of time.
ii.Minimise accumulation of cash:
This system helps to estimate the requirement of pretty cash for a period.So it enables to reduce the cash amount of petty cashier.
iii.Facilitates internal check:
Impress system of petty cash ensures effective internal check of cash balance in the hands of pretty cashier and his petty expenses.
iv.Reduces fraud:
This system of petty cash helps to keep a close watch on petty expenses.So that fraud and mis representation can be reduce to a great extend.
v.Keeps the staff vigilant:
The impress system of petty cash complete the petty cashier to maintain up to date records.As a result the petty cashier and his staff always remain vigilant.
