Petty cash book homework help

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The word petty means small. In a large scale business, the accounts department focuses on major expenses covered in the business such as production, transportation, marketing etc. But, there are many other small expenses that are excluded just because either they are simply ignored by the management or lack of knowledge about their recurrences. A separate cash book is advised to be maintained regarding these petty or small expenses and is called as petty cash books. The main reason to introduce them is to reduce the burden of expenses and their math from the main cash book. Our Petty cash book homework help article is dedicated to various aspects of petty cash book. Scroll down to learn more.

System of petty cash accounting

Usually the petty cash accounting is divided into three basic systems. They are listed below by our Petty cash book homework help team experts.

1. Open system: a petty cashier is appointed to look after the small expenses and hence the money from the chief cashier is received bythe petty cashier at regular intervals. The petty cashier looks after each and every need of the office as far as the limited expense is concerned.
2. Fixed advance system: a fixed amount of cash is provided to the petty cashier by the chief cashier on a per month basis. It’s the petty cashier’s wish to use it for the rest of the month or expend it on one single entity.
3. Imprest system: the complete petty expenses for a particular time period is evaluated by the chief cashier and it is termed as imprest cash. This sum is delivered to the petty cashier at the beginning of that time period. The statement of petyepenses is prepared by the petty cashier at the end of each time period and submitted to the chief cashier. The amount spent plus the amount unspent is considered to be the imprest cash and at every time period it does not exceeds.

Preparation of a petty cash book

There are a certain number of steps required to prepare the petty cash books. They are enlisted below by our Petty cash book homework help team experts as

1. Purchase information: All the small expenses in figures should be present with the petty cahier so that these information can be fed into the cash books.
2. Balance information: These are the information regarding the dates and other purchasing aspects. If the purchase is used somewhere, then the specific usage of that purchase should be mentioned.
3. Reconciliation: the process to do the math. The transaction amount should be clearly identified even after the removal and addition of extra amount or fund in to the cash book.
4. Integration: integration of all the petty cashes separately is also important. In our Petty cash book homework help article we suggest the students to segregate the profit from the petty cash to make it easier to get displayed during tax aversions.

Example for a petty cash statement

Petty Cash Books

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