All transaction
are not recorded in main cash book which are related to payments of small
amount for day to day expenses of business organization.
There are
following two reasons
First:
It will increase the cost of maintaining books of co. and waste the time of accountant to record just petty expenses in cash book.
It will increase the cost of maintaining books of co. and waste the time of accountant to record just petty expenses in cash book.
Second:
By recording all small expenses in cash book, it may occur that very important transaction is ignored to record.
By recording all small expenses in cash book, it may occur that very important transaction is ignored to record.
Types of Petty Cash Book
1. Simple
petty cash book
This is prepared like main cash book. In this petty cash book all expenses are recorded only one column. This Simple petty cash book is prepared on collected receipt basis.
This is prepared like main cash book. In this petty cash book all expenses are recorded only one column. This Simple petty cash book is prepared on collected receipt basis.
2. Analytical or columnar petty cash book
If any big corporate wants to all their petty expenses in petty cash book , analytical or columnar petty cash book is best option for them , because in analytical or columnar petty cash book , there is separate column of any particular expenses .
If any big corporate wants to all their petty expenses in petty cash book , analytical or columnar petty cash book is best option for them , because in analytical or columnar petty cash book , there is separate column of any particular expenses .
With
this, accountant can know on what item what amount has be expended .
To make analytical petty cash book in excel sheet is easy due to you can use Excel's large column for this purpose.
To make analytical petty cash book in excel sheet is easy due to you can use Excel's large column for this purpose.
Small or large companies maintains two types of Petty Cash Book for all cash transactions of a business. It depends on nature, volume and necessity of transactions of a business organization. Cash transactions might be of cash or cheque.
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