As the cash book lists bank payments & receipts, a petty cash book is needed to record actual cash

transactions.

Voucher is a form which shows what a payment is for .

Imprest systems is a system by which a refund is made of the total paid out in a period.

A worked example of a petty cash book:

Step 1 Enter date and details of each payment .Put in the total column. Step 2 For step 1 also put the amount in the column for the type of expense. Step 3 At the end of each period,add up the totals column Step 4 Now add up each of the expense columns. The total of Step 3 should equal the total of all the expense column Step 5 Then balance off the petty cash book ,carrying down the petty cash in hand balance to the next period

Write up a petty cash book,with analysis columns for office expenses,motor expenses ,cleaning expenses and casual labour.The cash float brought down is $600 a the amount spent is reimbursed on 28 Feb.Show the balance carried down to 1 March Year 8 $ Feb 1 Letterheadings 32 2 F.Lee-casual labour 15 2 Unique Motors- motor repairs 33 4 Petrol 27 5 Paper clips 10 8 Envelopes 12 9 Cleaning materials 15 11 C.Hop- casual labour 27 13 Mr.Ng-cleaner 21 16 Typewriter ribbons 24 18 Motor taxation 60 21 K.Kwan - casual labour 20 Also show how the items for motor expenses and office expenses would appear in the general ledger.

For example:

Petty Cash Book

Receipts Date $ Year 8 600 Feb-01 1 2 2 4 5 8 9 11 13 16 18 21 Details Voucher No Total $ Bank Letterheading F.Lee Causel Labour Unipue Motors Petorl Paper clips Envelopes Cleaning materials C.Hop-Causel Labour Mr.ng-cleaner Typerwriter ribbons Motor taxation K.kwan-Causel Labour 1 2 3 4 5 6 7 8 9 10 11 12 296 304 600 32 15 33 27 10 12 15 27 21 24 60 20 Office Exp $ 32 15 33 27 10 12 15 27 21 24 60 78 120 36 20 62 Motor exp $ Cleaning Causel Exp's Labour $ $

28 Bal c/d 600 296 Mar-01 Bal b/d 304 Bank

General Ledger

Motor Expenses
Year 8 Feb 28 Petty cash $ 120

Office expenses
Year 8 Feb 28 Petty cash $ 78

Now you know how to prepare a petty cash book ???

Year 3 May 1

Exercise
The cashier hands a cheque for$100 to the petty cashier to enable him to obtain cash for the starting float of petty cash $ Stationery Voucher No. 1 5.6 Postage Voucher No. 2 8.7 Cleaning expenses Voucher No. 3 15.2 Payment of amount to K Sutton in the purchases ledger Voucher No. 4 27.4 Postage Voucher No. 5 6.3 S-Small- travel exp. Voucher No. 6 4.5 Stationery Voucher No. 7 3.2 Cleaning expenses Voucher No. 8 12.4 Telephone phone bill Voucher No.9 1.2 Voucher No. 10 6.3

3 5 8 12
17 20 23 25 27

29 Postage

31 The cashier reimburses the petty cashier the amount paid out to date

Receipts Date $ 100 Year 3 May-01 3 5 8 12 17 20 23 25 27 29

Details

Petty Cash Book Voucher Total Postage Stationery No $ $ $ 1 2 3 4 5 6 7 8 10 5.6 8.7 15.2 27.4 6.3 4.5 3.2 12.4 6.3 6.6 89.6 21.3 11.6 GL 1 101.2 5.6 8.7

Travel Cleaning Ledger Ledger Exp's Folio Accounts $ $ $

1.2

Bank Stationery Postage Cleaning K Sutton Postage S Smalltravel Stationery Cleaning Telepone Postage

15.2 PL1 6.3 4.5 3.2 12.4 27.4

31 Bal c/d 101.2 11.6 88.4 Bal b/d Bank

8.8 GL 2

4.5 GL 3

27.6 GL 4

27.4

General Ledger
Postage
Year 3 $ May 31 Petty cash 21.3 Stationery Year 3 $ May 31 petty cash 8.8 Travel Exp. Year 3 $ May 31 Petty Cash 4.5 Cleaning Year 3 $ May 31 Petty Cash 27.6

General Ledger
Bank Year 3 May 1 Petty Cash Jun 1 Petty Cash $ 100 88.6

Purchases Ledger
K Sutton

Year 3 $ May 31 Petty Cash 27.4

Revision Notes
The petty cash book saves 1) the main cash book 2)the ledger accounts from containing a lot of trivial details

The use of the petty cash book enables the chief cashier to delegate this type of work to a more junior member of staff
Under the imprest system,at the end of a period ,the cashier reimburses the petty cashier the amount spent in the that period ,so as to make up