Question

Reasons for maintaining a petty cash book

Answer 1

Importance of Petty Cash Book

• It records all the petty expenses incurred in the organisation

• It avoids the inconvenience of using checks to make small payments.

• It assists in updating cash transaction records and allows division of labour in an organisation.

• It provides information on small payments made to meet certain expenses.

• It can be used to control petty expenses since it allows for comparison of the petty expenses incurred between two periods.

• Small businesses such as restaurants find petty cash log important because it avails funds taht can be used to meet unpredictable shortfalls