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Petty Cash Book
In every business, of whatever size, there are many small cash payments such as conveyance, carriage, postage, telegram, etc. These expenses are generally repetitive in nature. If all these small payments are recorded in the cash book, it will be difficult for the cashier to maintain the records all by himself. In order to make the task of the cashier easy, these small and recurring expenses are recorded in a separate cash book called “Petty Cash Book” and the person who maintains the petty cash is called the “Petty Cashier”.
Analytical Petty Cash Book
As in the case of any other cash book, petty cash book also has the debit side and the credit side. The debit side is smaller and has very infrequent entries because cash receipt by the petty cashier is mainly from the cashier at the beginning or close of a specified period. The credit side is bigger and thus has many columns. For each important petty expense there is a separate column, and therefore columnar cash book is another name for this petty cash book. These analytical columns helps to know the actual amount spent on each and every type of petty expenses for the specified period. Each petty payment is first entered in the total payments column, and then recorded in the respective analytical column, so that :
i. the total amount spent on each expenses for a particular period can be easily ascertained by adding up the respective column.
ii. only the periodical total of each column is posted to the ledger.
iii. the total petty payment for any period can be easily ascertained from the total payments column.
The analytical petty cash book may be designed according to the requirements of the business.
Explanation of columns in the analytical petty cash book
1. Receipts: This is the first column of the petty cash book. Amount received by the petty cashier for meeting petty expenses and the opening balance of petty cash will be recorded in this column.
2. C.B.F.N: This refers to Cash Book Folio Number. In this column we write the page number of the cash book where cash paid by the cashier is recorded.
3. Date: In this column, the date of receipt / payment of cash is recorded.
4. Particulars: This column records the details of the receipts / payments. Cash received in the beginning is shown as ‘To cash’ and all the petty expenses are shown as ‘By expenses’ (name of the expense).
5. V.N.: The serial number of the voucher (cash payment) is written in this column.
6. Total Payments: This column records the amount of every expense. At the end of the week or month expenses are totalled and afterwards balanced. The total expenses of the week or the month is compared with the total of the receipts column and the balance is obtained.
7. Postage and Telegrams: This column records postal expenses like post card, envelope, inland letter, postage stamps, registered letter, parcel, telegrams and telephone charges.
8. Printing & Stationery: It includes expenses incurred for purchasing materials such as paper, ink, pencil, eraser, carbon paper and other items of stationery.
9. Cartage / Freight / Carriage: In this column carriage inward of goods is recorded. It includes cartage paid to coolie, tempo charges etc.
10. Travelling Expenses / Conveyance: In this column fare for hiring auto rickshaw, bus, train, taxi etc., are recorded.
11. Office Expenses & Repairs: Minor repairing charges and petty office expenses like cleaning are included in this column.
12. Sundry Expenses / Sundries: Generally columns of important petty expenses of the business according to the nature and type of business are prepared. In addition to these important expenses, there may be certain expenses, which may not have specific columns for them. Expenses like refreshment, charity, tips, amount paid to scavengers etc., are recorded in this column.
13. L.F.: This refers to the page number of the ledger where the respective account is recorded.
14. Personal Accounts : Small amount of money paid to individuals are entered in this column.
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