What Is Petty Cash Book?

Introduction

A petty cash book is a financial record that tracks small, frequent cash transactions that are below a predetermined threshold. These transactions are often for minor expenses such as office supplies, postage, or travel expenses.

Maintaining a petty cash book is essential for businesses to keep accurate records of these small expenses and ensure that they are used for legitimate business purposes.

Benefits of Keeping a Petty Cash Book

There are several advantages to maintaining a petty cash book:

• Accurate record keeping: A petty cash book provides a centralized record of all petty cash transactions, making it easy to track expenses and prevent misuse of funds.
• Expense control: By setting a predetermined threshold for petty cash transactions, businesses can control and monitor small expenses, preventing overspending.
• Audit trail: A well-maintained petty cash book serves as an audit trail, providing a clear record of transactions for auditors or inspectors.