Petty cash book journal in accounts

Chapter 3 accounting books and records petty cash book meaning imprest accounting process and principles accounting cycle 8 s in the accounting. Examples of petty cash bookjournal cash book ca cpt cs. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal. All receipts are recorded on the debit side and all payments are recorded on the credit side of petty cash book by the petty cashier. Journal is an integral part of bookkeeping which is the starting point of accounting and it records all the business transactions whereas the petty cash book records the transaction related to the cash account.

Petty cash accounting involves establishing a petty cash policy, setting up a petty cash log, creating journal entries, and reconciling the petty cash account. When an analytical petty cash book is maintained for recording the petty expenses, it will be practically more convenient to consider the petty cash as a separate account and take cheques issued for the petty cash imprest as a debit to petty cash account and all petty expenses paid as credits in petty cash account. The cashier creates a journal entry to record the petty cash receipts. For this purpose, a petty cashier is appointed by the chief cashier. Petty cash book is the accounting book that is used for the purpose of. We have covered introduction to double entry system, journal, ledger. On the books meaning accounting image collections book. These are expenses which are incurred day after day. Petty cash book format example definition explanation.

The petty cash custodian refills the petty cash drawer or box, which should now contain the original amount of cash that was designated for the fund. Like a general cash book, a petty cash book has a debit and a credit side. To show this, debit your petty cash account and credit your cash account. The petty cash journal contains a summarization of the payments from a. This video shows the creation and replenishment of petty cash. Record that check by posting the total petty cash expense to the proper accounts. The general journal entry for this is petty cashier encashes the cheque and keeps this money in a box under lock and key termed as a petty cash box. This journal entry, in essence, subdivides the petty cash portion of available funds into a separate account. The journal entry to start a petty cash fund only happens once when the petty cash is first taken out of the cash bank account and put into the petty cash fund. It is another cash book which is maintained, generally, in large business concerns to reduce the burden of main cash book, in which numerous transactions involving petty small amounts are recorded. The petty cash journal entry is a debit to the petty cash account and a credit to the cash account. A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure.

If so, you need to record deposits and withdrawals in your books. The entry must show an increase in your petty cash account and a decrease in your cash account. Recording of transaction in cash book and journal with. When your petty cash cashier puts money into the petty cash fund, they must create a journal entry in your books. How to set up and maintain a petty cash account basic. Examples of petty cash book, learn the basics of accounting process. The petty cash account is used to make small purchases. The is only one money column on the debit side and all sum received from time to time by the petty cashier from the chief cashier are entered in it. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. It is another cash book which is maintained, generally, in large. Petty cash book is an accounting book used for recording expenses which are small and of little value, for example, stamps, postage and handling, stationery, carriage, daily wages, etc. We have covered introduction to double entry system, journal, ledger, trial. There are two primary types of entries in the petty cash book, which are a.