Petty Cash Book

Petty cash book is defined as a record of a relatively small amount of cash in hand for making payments of various miscellaneous expenses, for example postage, stationery, or telegrams.

A petty cash book is defined as a type of cash book that is maintained to record various kinds of small, regular expenses, easily payable through the use of cash. These expenses can be for office expenses such as tea, bus fares, newspaper expenses, casual labour, etc. These books are also maintained in addition to regular cash books. The person in charge of formulating a petty cash book is a ”Petty cashier”. 

They are also responsible for spending the petty cash. A petty cash book has a debit and credit side. All the receipts are recorded on the debit side, and all payments are recorded on the credit side of the cashbook. In almost all businesses, it is considered highly important to maintain a specified sum of cash in hand to meet these small, regular expenses.

Petty Cash Book for Large Firms

Large business enterprises dealing with heavy transactions usually make payments through the bank. That’s why maintaining a petty cash book is necessary. The Imprest system of petty cash books is one of the many techniques used to design a petty cash book. It’s regarded as the most used method because of its reliability.

Petty cash books are considered a branch of the cashbook. It is not precisely like the cashbook. The amount of money at the hands of a petty cashier is a part of the cash balance of the business enterprise. 

Imprest System of Petty Cash Book 

The Imprest system of petty cash books is regarded as one of the most scientific methods used to maintain a cash book. Under this system, a fixed amount of money is provided to the petty cashier to cover the petty expenses for that particular month. By the end of the month, the petty cashier has to hand over the statement of expenditures to the chief cashier.

After receiving the statement of petty expenses, the chief cashier hands over the same amount of cash to the petty cashier, thus maintaining the imprest for the next month, the same as the beginning of the previous month.

Advantages of Imprest System of Petty Cash Book 

  1. It acts as a healthy check on the petty cashier as he has to submit the statement of petty expenses to the chief cashier.
  2. As all the petty expenses have to be recorded from time to time in the cashbook, the petty cash book remains up to date.
  3. The imprest system of petty cash books prevents unnecessary accumulation of cash as the petty cashier cannot draw sums of money as and whenever he likes.
  4. The head cashier is always aware of the cash given to the petty cashier under the Imprest petty cash system. 
  5. Imprest petty cash system allows one to ascertain and know the number of expenses of the same nature of each column separately for a specific period.

Petty Cash Book: Format 

Let’s look at a simple petty cash book format.

Petty cash book 

Types of Petty Cash Book 

There are two types of petty cash books. These are 

  1. Simple petty cash book
  2. Analytical petty cash book

Simple Petty Cash Book  

It is similar to that of the original petty cash book. The cash that is received is written under the debit section of the cash book. Payments made by the petty cashier are recorded on the credit side of the book. 

Analytical Petty Cash Book 

A separate column is given to each petty expense on the credit side in an analytical petty cash book. Whenever a petty expense is recorded in the total payment column, the same amount is recorded in the specific petty expense column.

An analytical petty cash book is the most reliable and effective recording of petty expenses.


A petty cash book is a record of minor cash expenditures, that are sorted by month and date. It is a type of ledger book, in most cases. The Imprest system of petty cash books is regarded as one of the most used systems for maintaining a cash book. There are two types of petty cash books. One of these two is called the simple petty cash book, and the other is the analytical petty cash book. The petty cash book format is very important to keep in mind while preparing one, as it ensures the accuracy and reliability of transactions so recorded. The petty cash book format is very important to consider while preparing a petty cash book. 


Frequently Asked Questions

Get answers to the most common queries related to the K-12 Examination Preparation.

What is the use of petty cash?

Answer: A petty cash book is a physical record of various small but regular expenses in a business concern. These ex...Read full

What are some of the disadvantages of a petty cash book?

Answer: Some of the cons of a petty cash book are as follows:  a...Read full

What is a ledger book?

Answer: A ledger book is a book in which all monetary transactions are maintained in a summarised and classified for...Read full

What are the types of entries made in Petty Cash Book

Answer: There are mainly two types of primary entries in a petty cash book: debit and credit. The debit side of a pe...Read full