Page 44 - F3 -FA Integrated Workbook STUDENT 2018-19
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Chapter 3
3.5 Petty cash book
A petty cash book records individual cash receipts and payments (‘notes and coins’)
as opposed to transactions recorded in the cash book which will pass through the
bank account. It is normally analysed in a similar manner to the cash book. It is
typically used for small amounts of sundry expenditure, such as purchase of office
refreshments, cleaning materials and postage stamps.
Many business entities use an imprest system to account for and control petty cash
transactions and balances. An amount is withdrawn from the bank account which is
referred to as ‘a petty cash float’. The ‘float’ is then used to pay for various sundry
expenses. Any expenditure must be evidenced by an expense receipt or voucher. At
any point in time the cash balance, together with the expense vouchers, should
agree to the total of the float. Periodically, the cash balance will be replenished to the
predetermined amount to reimburse amounts paid out.
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