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    Petty Cash Book Powerpoint

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    gabriellestewart334

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    Petty Cash Book Powerpoint

    Uploaded by

    gabriellestewart334
    103 views7 pages

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    PETTY CASH BOOK POWERPOINT.pptx

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    © All Rights Reserved
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    103 views7 pages

    Petty Cash Book Powerpoint

    Uploaded by

    gabriellestewart334

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 7

    THE PETTY CASH BOOK

    AND THE IMPREST SYSTEM


    PURPOSE OF THE PETTY CASH
    BOOK (PCB)
    ⚫ The petty cash book is kept to record the payment of
    small expenses incurred by a member of staff on
    behalf of the business such as postage, travelling,
    cleaning supplies etc.
    ⚫ It is maintained by a junior member of staff called a
    petty cashier.
    THE IMPREST SYSTEM
    ⚫ This simply means that a specific amount is paid into
    the fund at the beginning of each month (called the
    cash float) and is used to make payments
    (disbursements) throughout the month.
    ⚫ Whatever amount was disbursed will be reimbursed to
    the petty cashier to add to the unused amount, to
    restore the cash float to the original amount to start
    the new month.
    THE PETTY CASH VOUCHER
    ⚫ This is the source document which is used to prepare
    the petty cash book.

    ⚫ It provides proof of each disbursement which is made.

    ⚫ It shows the date, expense paid, amount, petty cash


    voucher number and the name that staff member
    receiving the payment and the signature of the person
    who approves the disbursement.
    DOUBLE ENTRY
    ⚫ The double entry for cash given or reimbursed to the petty cashier is:
    ⚫ Dr. Petty Cash
    ⚫ Cr. Cash

    ⚫ Cash payments made out of the petty cash fund are credited in the petty cash book.

    ⚫ At the end of the month, the petty cash book is totalled, balanced off and the double
    entry completed with postings to the debit side of each expense account in the general
    ledger.
    ⚫ Payments to creditors from the petty cash fund is debited to each creditor account in
    the Purchases Ledger.
    ADVANTAGES
    ⚫ It reduces the number of entries that are made to the
    general ledger accounts and to the cash book.
    ⚫ It reduces errors since the petty cashier is in charge of a
    small fund from which only specific payments are
    made. Also, since the petty cashier has to reconcile the
    amount disbursed with the total value of the petty
    cash vouchers, it is more difficult to make errors and
    commit fraud.
    PRACTICE TIME
    ⚫ Chapter 19

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