When a petty cash book is kept there will be

The correct option is D) Fewer entries in the general ledger

To understand why option D is correct, we need to understand the concept.

• Petty cashbook is a special cashbook prepared for recording petty or small cash expenses.
• The benefit is that the chief cashier can focus on large cash and bank transactions and there are fewer transactions in the main cashbook.
• The petty cashier is provided with a fixed amount for a month or week and is reimbursed the amount spent at the end of the period after he sends the details of expenses to the chief cashier.
• There are entries for the transfer of cash to the petty cashier in the main cashbook only.

Option A ‘No entries made at all in the general ledger for items paid by petty cash ‘ is wrong. It is not possible to omit entries of petty expense just because there is a petty cashbook. There will be entries related to:

• The cash is given to the petty cashier in a fixed amount or the amount spent as petty expenses during the month or week.

Petty cash A/c  Dr.        Amt

    To Cash A/c                   Amt

 Option (B) ‘The same number of entries in the general ledger is wrong because there can never be the same number of entries as all the petty expenses are recorded in the petty cashbook and only the entries for transfer of cash to the petty cashier is recorded in the main cash book.

Option D ‘More entries made in the general ledger​’ is wrong because the number of entries actually reduce as only petty cash transfer entries are recorded in the main cashbook instead of numerous entries of petty cash transactions.