Page 15 - NOTES- CASH BOOK

Recording of Transactions - II 109

Rohit’s Account
Receipts Payments
Date Particulars J.F. Amount Date Particulars J.F. Amount
Rs. Rs.
2017
Sept.24 Bank 1,500

Rent Account
Receipts Payments
Date Particulars J.F. Amount Date Particulars J.F. Amount
Rs. Rs.
2017
Sept.30 Bank 2,500

Salary Account
Receipts Payments
Date Particulars J.F. Amount Date Particulars J.F. Amount
Rs. Rs.
2017
Sept.30 Cash 3,500

4.1.3 Petty Cash Book
In every organisation, a large number of small payments such as conveyance,
cartage, postage, telegrams and other expenses (collectively recorded under
miscellaneous expenses) are made. These are generally repetitive in nature. If
all these payments are handled by the cashier and are recorded in the main
cash book, the procedure is found to be very cumbersome. The cashier may
be overburdened and the cash book may become very bulky. To avoid this,
large organisations normally appoint one more cashier (petty cashier) and
maintain a separate cash book to record these transactions. Such a cash
book maintained by petty cashier is called petty cash book.
The petty cashier works on the Imprest system. Under this system, a definite
sum, say Rs. 2,000 is given to the petty cashier at the beginning of a certain
period. This amount is called imprest amount. The petty cashier goes on making
all small payments out of this imprest amount and when he has spent the
substantial portion of the imprest amount say Rs.1,780, he gets reimbursement
of the amount spent from the head cashier. Thus, he again has the full imprest
amount in the beginning of the next period. The reimbursement may be made
on a weekly, fortnightly or monthly basis, depending on the frequency of small
payments. (In certain cases, the petty cash system is operated through the

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