How to enter :Paid for Advertisement in Analytical petty cash book.
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Petty Cash Book
A cash book acts like both a journal and a ledger for cash transactions. A petty cash book is just another kind of cash book that records petty cash transactions, i.e. small recurring payments. Let us learn about the petty cash book and the various systems of maintaining the said account.
Petty Cash Book
When running a firm you can imagine the number of transactions that occur in a day. There are especially many petty cash transactions, i.e. expenses of small amounts that are usually recurring in nature. These are your everyday expenses for food, conveyance, stationary, ink for printers, postage, etc. So instead of recording all such transactions in the cash book, we record them in a petty cash book.
So petty cash is an account that records all the petty cash expenses in chronological and systematic order. The petty cashier is responsible for updating and maintaining the petty cash book. This separation of cash books has many advantages of the firm like,
All petty expenses are maintained separately. So this system is more systematic and easier for auditing as well.
- Petty cash books will allow us to easily compare and efficiently control petty expenses.
- Recording all of these transactions in the cash book can get to be very tedious and cumbersome. And so this responsibility is divided between the cashier and the petty cashier. This division of work makes them both more efficient.
- This makes the cash book less voluminous and more informative and clean.