Petty Cashbook

Week: 10 (Ten)

Topic: Petty Cashbook

Meaning of Petty Cashbook

A petty cashbook is a book of accounts used to record small frequent cash expenses of a business. These expenses are too minor to be paid by cheque and include items such as transport fare, stationery, postage, office refreshments, cleaning materials, etc.

Importance of a Petty Cashbook

1. It reduces workload on the main cashbook.
2. It is used to control small expenses.
3. It provides clear records for auditing.

Columns in a Petty Cashbook

The number of columns in a petty cashbook is determined by the number of small expense items the business decides to record in it. Which means some businesses will have more columns in their petty cash book than the others.

Imprest System

The imprest system refers to the special way a petty cash account is managed. It involves the following;

1. Petty cash float: A fixed amount called imprest is given to the petty cashier to pay for small office or business expenses. The cashier pays for the identified expenses from that money and records them in the petty cashbook.
2. Petty cash retirement: At the end of a specified period (a week, a month, every two or three months, etc), the petty cashier will submit all vouchers and receipts for payments made to the main cashier or accountant.
3. Petty cash reimbursement: The total amount which has been spent by the petty cashier is refunded which brings the cash with the petty cashier back to the original imprest.

Example: A business gives a petty cashier N20,000 as imprest for the month of August 2025. During the month, the following expenses were made; transport – N4,000, stationery – N3,500, postage – N1,500 and refreshments N2,000.

Record these in the petty cashbook.

Solution:

Business Name

Petty Cash Book

Homework

Record the transactions below in the petty cashbook of Torugbene Multiple Ventures International using the following analysis columns; fuel, cable subscription, recharge card, office cleaning and transport.

1. On 1st September, 2025 the petty cashier was given an imprest of N50,000.
2. On 5th September, fuel of N10,300 was bought.
3. On 11th September, DSTV subscription of N7,500 was made.
4. On 18th September, recharge cards worth N13,000 was bought for the marketing staff.
5. On 25th September, air freshener worth N3,500 was bought.
6. On 28th September, N2,200 was spent as transport fare by the petty cashier to go the bank.
7. On 30th September, petty cash retirement was done and the appropriate amount was refunded to the petty cashier.