Double column cash book explanation, format, example. The petty cashier of john and james company paid cash for the following expenditures during march 2018. Examples of petty cash bookjournal cash book ca cpt. Generally a columnar petty cash book is used in which different columns are provided for different petty expenses. Petty cash accounts are managed through a series of journal entries.
A petty cash book is generally maintained on a columnar basis a separate column being allotted for each type of expenditure. For example, imagine that the galaxys best yogurt runs out of milk one evening. Examples include receipt books, cheque butts, vouchers etc. Petty cash book explanation, format, example, ordinary. Types of petty cash book in accounting with diagrams and examples.
C or cb cash book, j journal, pc petty cash book etc. Journal entry for removing money from the petty cash fund. Petty cash book format example definition explanation. You or your petty cash cashier must also create journal entries showing what petty cash funds go toward. The credit side consists of several analysis columns. Define the purpose and use of a petty cash fund, and prepare. The balance of the petty cash book will be shown on the asset side of balance sheet as cash in hand at the end of the year. We have covered introduction to double entry system, journal, ledger. The double column cash book also known as two column cash book has two money columns on both debit and credit sides one to record cash transactions and one to record bank transactions. We have covered introduction to double entry system, journal, ledger, trial balance, subsidiary books, cash book and petty cash. Examples of these payments are office supplies, cards, flowers, and so forth. All the incomes and expenses which are practically not possible to settle.
The cash column is used to record all cash transactions and. The petty cash book generally has a number of columns for the amount on. Petty cash is a small amount of cash that is kept on the company premises to pay for minor cash needs. Petty cash is stored in a petty cash drawer or box near where it is most needed. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal. Knowing about the essential characteristics of a general cash book will help us to understand more about it. Petty cash is a small amount of cash that needs to be kept in the office for the utilization of daily small expenditures. Examples of petty cash book, learn the basics of accounting process. The petty cash book is to enter how the cash available for daily expenses are spent for example milk, tea, taxi charges and postage. A person who is in possession of the cash in the organization is generally called cashier.
If any alteration of established petty cash fund is not required, the new journal. A cash book acts like both a journal and a ledger for cash transactions. From the initiation of journal, the ledger account is prepared, with the help of which the final books of accounts of the company is prepared. The same person is responsible for the appropriate accounting of each cash transaction done through him. It is an accounting book used for recording expenses which are of small and of little value. A petty cash is a cash book used to enter all small or petty expenses obtained.
A petty cash book is just another kind of cash book that records petty cash transactions. Small or large companies maintain 2 types of petty cash book for all cash. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the daytoday normal expenditures of the business which is not related to the direct line of the business. Examples include postage due, reimbursement to employees for small. Petty cash book explanation, format, example, ordinary and imprest. Journal is an integral part of bookkeeping which is the starting point of accounting and it records all the business transactions whereas the petty cash book records the transaction related to the cash account. The most common examples are the single, two and three column cashbooks, however, it is possible to have multicolumn cash books, such as the petty cashbook, which can be used to provide further analysis of receipts and payments. Journal is an integral part of bookkeeping which is the starting point of accounting and it records all the business transactions whereas the petty cash book. This journal entry, in essence, subdivides the petty cash portion of available. The cash ledger book can act as both a journal and a ledger and comes in various formats. Petty cash, also known as imprest cash, is a fund established for making small payments. Then, create another journal entry debiting the petty cash account and crediting the cash account. The is only one money column on the debit side and all sum received from time to time by the petty cashier from the chief cashier are entered in it.