The Petty Cash Book

The Petty Cash Book

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The petty cash book

Once the petty cash vouchers have been completed and authorised, information is recorded in the petty cash book. The petty cash book is used to collate the details of the petty cash expenditure for the period, and calculate the amount needed at the end of the period to reimburse the petty cash fund. The petty cash book could be recorded on a daily basis or every few days, depending on how often the petty cash fund is accessed.

The following is an example of an extract from Gizmos’ Petty Cash Book completed in July 2012:

Let’s examine it closely…

Design of the petty cash book

The petty cash book can be set out in different ways, depending on the requirements of the business. However, its format must enable all the information to be entered easily and clearly. The headings of a petty cash book are as follows:

The Date column is used to record the date of any change to the petty cash fund, ie money being placed into the fund or taken out of it. The date is particularly important because the petty cash fund is reimbursed after a set period of time (in Gizmos’ case, after a fortnight). Therefore, the date column is also used to keep track of when the fund needs to be reimbursed.

The Particulars columnrecords the details of any changes to the petty cash fund, whether that is petty cash expenditure or money being put into the petty cash fund.

The Voucher numbercolumn is used to record the voucher numbers when expenditure is made out of the fund.

Whenever money is placed into, or received by, the petty cash fund the Cash Receipts column is used. This occurs when the fund is initially set up and when it is reimbursed at the end of each petty cash period.

Cash Payments column records money taken out of the petty cash fund for expenditure. Note that amounts recorded in this column include GST, therefore representing the full amount of cash that leaves the fund when each petty cash voucher recorded.

The GST column shows the GST portion of each amount of expenditure. Remember that GST (goods and services tax) is a tax of 10% imposed by the government on most goods and services. As businesses can claim back the GST they pay on many items, it needs to be shown separately.

You will revise the calculation of GST later.

The Analysis of Expenditure columns are used to categorise the petty cash expenditure (excluding GST) according to the account that would be affected.

Remember that the petty cash voucher has a space in which to record the account to be charged. This space is used to classify the expenditure.

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