Petty Cash Book
- Setting aside some cash amount to meet daily business needs of small payments.
- Recording of small cash payments like stamps or taxi fares.
- No cheque transactions
Purposes/Advantages of Petty Cash Book
- Reduces number of entries in main Cash Book
- Increase efficiency and internal control - an entrusted person can look after just the Petty Cash
- Quick transactions since items are small payments
The Imprest System
- A system for controlling Petty Cash
- A float or imprest amount is given in advance
- Small payments are made out of this float - ALL payments must be supported with a Petty Cash voucher that is signed
- Total claim to restore the original float MUST equal total amounts on vouchers
- Analogy: Refilling water jug after being used to fill up drink cups.