DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : K.HANUMANTHA RAO

Designation : Head of Section
Branch : Commercial & Computer
Practice (CCP)
Institute : GPW/Guntur
Year/Sem : I Yr
Subject : ACCOUNTANCY-I
Sub-Code : CCP-102
Topic : CASH BOOK
Duration : 50 minutes
Sub Topic : Petty Cash Book
Teaching Aids : PPT, ANIMATIONS
CCP102.69 1
Objectives
On completion of this class you will be able to
know :
 What is Petty Cash Book , it’s importance

 What is Imprest system of Petty Cash

 Analytical Petty Cash Book Preparation

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Importance of Petty Cash Book
2. Some business people maintain cash book as well
as Petty Cash Book.
3. Small payments like telegrams, postage, cartage,
transportation, stationery are entered in the Petty
Cash book.
4. The person who maintains the petty cash book is
called ‘‘Petty Cashier ’’.
5. It reduces the main cashier’s work. It helps us to
know the expenditure spent on each head.

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1. The proforma of petty cash book resembles the
cash book.
2. All receipts are recorded on debit side all payments
on the credit side.
3. The date and particulars column do not appear on
the credit side that appear on the debit side
4. A detailed analysis of expenses will be shown on
the credit side.
5. When detailed expenses are entered in the petty
cash book, then it is called ‘‘ Analytical Petty Cash
Book’’

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Imprest System
The petty cashier is given a sum of money in the
beginning of the period.
During the period he makes payment out of this
money.
At the end, firm reimburses him the amount paid by
him so that the balance of cash with him remains
same in the beginning of the period as well as at the

end of the period.

This is called the Imprest system of petty cash book.

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Example:
Suppose the petty cashier has received a cheque for
Rs. 500 on 1st March from the head cashier and spent
Rs. 485.50 for petty expenses during the month.

On 1st April, he will be given a new cheque for Rs.

485.50, the actual amount spent. The balance on 1st
April with the petty cashier will be as under.

Previous month’s balance + New cheque received

=14.50 + 485.50=Rs. 500.00

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How to enter transactions in
Petty Cash Book

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1. First read the transaction .

2. Think whether Cash/ Cheque received from the

head cashier or expenses paid.

3. If Cash/ Cheque received from the head cashier,

record Cash/ Cheque received in amount column
on the debit side of the Petty cash book.

4. Record the Date of the transaction in date column.

5. Record in particulars column as ‘‘ To Cash/Bank

a/c
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• If expenses are paid, record expenses on the
credit side i.e., ‘Total payments’ column of the
Petty cash book and also in the related ‘Analysis
of expenses’ column.
• Record the Date of the transaction in date
column.
• Record in particulars column as ‘By Name of the
Expenses a/c’.
• Record the Voucher Number in ‘Voucher No.’
column.
• Follow the above steps for every transaction.
• Balance the Petty Cash Book.
• Record the totals at the end of the month of all
columns of ‘‘ Analysis of expenses’’
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Proforma of Analytical Petty Cash Book

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 Proforma of Analytical Petty Cash Book

Cash L D Particulars Voucher Total Analysis of expenses

Received F a No Payments
Postage Printing Office Telegrams Travelling Carriage R
Rs t Rs
Rs Rs Expences Rs Rs Rs e
e
m
Rs
a
r
k
s

CCP102.69 11
Example 1: Prepare a petty cash book on the
Imprest system from the following
2006
Jan 1 Received Rs.1000 for petty cash
’’ 2 Paid bus fare Rs.10.00
’’ 3 Paid Cartage Rs.25.00
’’ 4 Paid for Postage and Telegram Rs.50.00
’’ 5 Paid for stationary Rs.40.00
’’ 6 Paid for postage and Telegram Rs.50.00
’’ 7 Paid for sundry exp Rs.40.00

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 Analytical Petty Cash Book
Recei L Date Particulars V Total Analysis of Expenses
pts F ouc Payment
conveyan Cartag Stationa Telegra Sundrie
her s
ce e ry ms & s Rs
No Rs Postage
Rs Rs Rs
Rs
1000 2006 To Cash
Jan 1
2 By convenience 10 10
3 By cartage 25 25
4 By postage & 50 50
telegram
5 By stationary 40 40
6 By postage & 50 50
telegram
7 By sundry exp 40 40
31 By balance c/d 215
1000 1000 10 25 40 100 40

785 Feb 1 To Balance b/d

215 Feb 1 To Cash
CCP102.69 13
Summary

Some business people maintain petty cash book in

addition to the main cash book.
Small payments like postage, transport etc are
entered in petty cash book.
The person who maintains this book is called petty
cashier.

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 Quiz

1 The person who maintains petty cash book is

called
a) Petty cashier
b) Head cashier
c) None of the above

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1. If detailed analysis of expenses are shown,
then the Petty Cash Book is called
a) Imprest system petty cash book
b) Analytical petty cash book
c) None of the above

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Frequently Asked Questions
1. Prepare a Petty Cash Book and show the ledger
accounts also.
2006
Jan 1 Cash Received from the cashier Rs.300
’’ 2 Paid for stationery Rs.20
Office expenses Rs.15
Paid for postage Rs.10
’’ 5 Paid for papers and ink Rs.10
Paid for telephone bill Rs.30
’’ 6 Paid for the staff Tiffin Rs.8
Paid for postage Rs.15
Paid for office expenses Rs.10
ANS: Cash Balance Rs.182CCP102.69 17
Thank you

CCP102.69 18