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THE PETTY CASH BOOK

Definition
Is the cash book which used to record small expenses/expenditure which take place from time to time within the business.
OR
Is the book which used to record the small expenditure which incurred by the business/organization for a certain period of time such as day to day, week to week or month.
PETTY CASHIER
Is a person who received money in order to meet petty expenditures.
ADVANTAGES OF PETTY CASH BOOK.
1. It helps the main cashier to deal with small payment
2. It facilitate the small payment without the use of cheque
3. It easy to check the petty cashier because the amount is small.
THE PETTY CASH VOUCHER/PAYMENT VOUCHER
These are vouchers are filled by petty cashier when made payments. These vouchers proof that payment has made.
STRUCTURE OF PETTY CASH BOOK.
The petty cash book has two side, received side and payment side.
THE TYPES OF EXPENSES MADE THROUGH PETTY CASH
1. POSTAGE Including parcel , telegram , stamp.
2. STATIONERY Including small items as ink , book, printing.
3. TRAVELING EXP Including petrol , tires etc.
4. SUNDRY ITEM Such as sugar, milk for office tea .
THE STRUCTURE OF PETTY CASH BOOK
AMOUNT
RECEIVED

FOLIO
DATE
DETAIL
PAYMENTS
ANALYSIS OF PAYMENTS
V.No
Total
Postage
stationery
Traveling exp.
G.Expenses

EXAMPLE:
On 1st March Hamisi received from chief cashier Tshs 40000/=
March 2. Paid for telegram 2000 /=
‘’ 3. Paid for postage 6000 /=
‘’ 4. Paid for bus fare 2000 /=
‘’ 5.paid for office cleanness 3200 /=
‘’ 6.stationary 8000 /=
Required:
Draw up A petty cash book.
EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK
EXERCISE.1:
Enter the following transaction in petty cash book of F. Funds with column for
(i)postage and telegram (ii) stationery (iii) traveling (iv) office expenses in the year 2010.
Jan 1. Receive petty cash 100000 /=
‘’ 1. Paid for sugar 7000 /=
‘’ 2.bought stamps 20000 /=
‘’ 3. Paid for pencil 5000 /=
‘’ 5. Bus fare 2000 /=
‘’ 8.telegram 15000 /=
‘’ 9.envelopes 4000 /=
‘’ 11.coffee 9000 /=
‘’ 15. Cleaning 2000 /=

EXERCISE 2
Enter the following of Machanga cooperative society in the petty cash book under the columned for postage water charge , transport charge ,electricity , stationery .
On Jan 1 2009 the petty cashier received Tsh 100000 a petty cash.
Jan 2. Paid water charge – 10000 /=
‘’ 3. Paid electricity charge – 6000 /=
‘’ 4. Bought stationery – 30000 /=
‘’10. Paid transport charge – 10000/=
‘’ 13.bought stamps _ 20000 /=
‘’ 15.bought stationery _5000 /=
‘’ 18 .paid transport charge _10000 /=
‘’ 27 .paid water charge _ 30000/=
‘’ 29 .paid electricity expenses _ 20000 /=
‘’ 30 .transport charge _ 20000 /=
‘’ 31. Bought stamp _ 20000 /=
Solution.QN1

DR
PETTY CASH BOOK
CR
AMO AMOUNT RECEIVED
F

DATE
DETAILS
PAYMENTS
ANALYSIS OF PAYMENTS
V.NO
TOTAL
POST
STATIONERY
O.EXPENSES
TRAV. Exp
Travel.Exp
G. Expenses
100,000

1-Jan
Cash
1-Jan
sugar
1
7,000
7,000
2-Jan
stamps
2
20,000
20,000
3-Jan
pencil
3
5,000
5,000
5-Jan
bus fare
4
2,000
2,000
8-Jan
Telegram
5
15,000
15,000
9-Jan
Envelopes
6
4,000
4,000
11Jan
coffee
7
9,000
9,000
15Jan
cleaning
8
2,000

2,000
64,000
39,000
5,000
2,000
18,000
31Jan
Balance c/d
36,000

100,000
100,000
36000
1Feb
Balance b/d
S
THE PETTY CASH BOOK
CR
Solution.QN2

EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK
THE IMPREST SYSTEM
The imprest system is where a refund is made of the total paid out in the period .
It is when a cashier gives the petty cashier enough cash to meet his needs for the following period at the end of period the cashier find out the amount spent by the petty cashier and gives him an amount equal to what spent. the petty cash in hand should be equal to the original amount with which the period was stated . This system is known as IMPREST SYSTEM and the amount is called CASH FLOAT.
example.1
The cashier gives petty cashier 50000.
The petty cashier paid out during a week 34570.
The balance of the petty cash at the end of the week 5430.
The cashier now gives the petty cashier 34570.
The petty cashier hands of the end of period 50000.
Example.2
The petty cashier of ABC secondary has a cash float of Tshs 200,000/=. If Tshs 146,000 and 4000 was spent on purchases of stationary and entertainment of teacher respectively, How much will be reimbursed by chief account to petty cashier?
Cash float given by chief cashier 200,000
Less expenses made by petty cashier
Purchases (stationary) 146,000
Entertainment to teachers 4,000
Total amount spent 150,000
CASH BALANCE 50,000
Therefore, 150,000 will be reimbursed to petty cashier to restore the imprest system of cash float 200,000 given.
EXAMPLE.3:
Enter the following transaction in petty cash book showing analysis column for carriage, traveling expenses and stationery. Restore the imprest and bring down the Balance for the commencement of the following month.
Feb 1 . Petty cashier in hunt sh 25000
Feb 2. Paid bus fare sh 3700, carriage 1400
Feb 3 . Paid bus fare sh 1800, office expenses 1200
Feb 3 .bought stationery for Tshs 4700
Feb 4. Paid carriage for 1900, bus fare sh 2500
Feb 5 .bought stationery for Tshs 2300
Feb 6 .paid office expenses for Tshs 1500
Balance the book as 8th Feb 2009
Solution
PETTY CASH BOOK
EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK
EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK
EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK

EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK
EXAMPLE.4
KASSIM employ a cashier who keeps a petty cash book on the imprest system. It has five analysis columns for postage , travelling , stationery, general expenses and ledger account. Rule a petty cash book and record the following weeks transactions inserting appropriate folio numbers and petty cash voucher number.
2002 Jan 11th drawn imprest of 2000/= pays postage Tshs 145/= bus fare Tshs 65/= pays
Mattew account Tshs 208/=
2002 Jan 12th pays fares Tshs 26/= , pays for note papers Tshs 55/= , collects from staff for
Private telephone calls Tshs 298/=
2002 Jan 13th pays for cleaning materials Tshs 28/= pays for tea and calls for typist’s
Birth day Tshs 36/=
2002 Jan 14th pays L. sasa account Tshs 225 , pays for cleaning materials Tshs 130/=
2002 Jan 15th pays cleaner wages Tshs 500, pays fares Tshs 12 pays window cleaner 25/=
Also rule off the book, bring down the balance in hand and restore the imprest to Tshs 2000/= as on 15th January 2002
Solution
EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK

EXERCISE 1
Rule a petty cash book with analysis columns for stationary , motor expenses, cleanliness, traveling and ledger
The float is Tshs 150,000/= for one week
May 1 received cash for the float
May 2 bought brooms Tshs 8000/= note book 5000/= and paid bus fare 3000/=
May 3 bought engine oil Tshs 15000 typing papers Tshs 12000/= and paid bus fare 3000/=
May 4 bought u bolt for van Tshs 3000/=
May 5 paid FREDY a supplier Tshs 18000/=
May 6 paid motor mechanic Tshs 20000/= bought office pains 4000/=
May 7 paid office cleaner Tshs 15000/=
Required
  • Record the transactions in the said petty cash book
  • Post to ledger account at may 7th
EXERCISE 2
The following transaction related to Hamisi for the month of October 2003
Oct 1 he main cashier give 150,000/= float to petty cashier a payments during the month were as follows
Oct 2 purchases marking pen ……………..9000/=
Oct 2 purchases sugar for Headmaster 5000/=
Oct 3 purchases petrol for…………………2000/=
Oct 4 paid Mr. Isiyo ………………………..5000/=
Oct 5 postage ……………………………….7000/=
Oct 5 cleaning expenses ……………………3500/=
Oct 6 petrol ……………………………………2200/=
Oct 7 traveling expenses …………………….6000/=
Oct 8 paid mama Patel ………………………..10,000/=
Oct 9 paid Mr. Dogo as entertainment …………..8000/=
Oct 10 postage ……………………………………2500/=
Oct 11 sundry expenses …………………………2400/=
Oct 12 paid Mr. chidio …………………………….5000/=
Oct 15 petty cash was reimbursed as the bursar traveling on duty
Required prepare the petty cash book
Use analysis as stationary, office expenses, petrol , traveling expenses, cleaning , entertainment and ledger





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EcoleBooks | BOOK KEEPING O LEVEL(FORM TWO) NOTES - THE PETTY CASH BOOK

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