Introduction & Definition

Firstly, let’s see what the term ‘petty cash book’ means. The word ‘petty’ means small. A petty cash book is identical to a cash book, maintained to record the small expenses of a business like stationery, postage, stamps, carriage, etc. The cash received by a petty cashier is recorded on the debit/ receipt side whereas, the money he pays is recorded on the credit/ payment side. The difference between the sum of the debit and credit items represents the balance of the petty cash in hand.

The reason the petty cash book is maintained is that it records small expenses that are inconvenient or too small to be registered in the cash book. This is also called a simple petty cash book. Just like a cash book is maintained by the accountant, the petty cash book is maintained by a petty cashier.

When it comes to the format, there are two types of petty cash book formats. They are-

1. Simple Petty Cash Book
2. Analytical Petty Cash Book

We have been discussing the simple petty cash book so far. Thus,

Format of Simple Petty Cash Book

Analytical Petty Cash Book

The analytical petty cash book has numerous columns for the recording of monetary transactions. In the analytical petty cash book, there are pre-existing columns for the usual expenses that are recorded frequently in the business which makes it easier for a business that has daily expenses for food, stationery, postage, etc. They’ll be having individual columns. It has numerous columns in it for the recording of expenses in it.

The key advantages of an analytical petty cash book are-

• One of the major key advantages is that the analytical petty cash book due to its format and structure saves time.
• The other advantage is that it helps the business in easy comparisons.
• It requires lesser time in recording.

Format of Analytical Petty Cash Book