Note on Petty Cash Book

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  • Things to remember

INTRODUCTION

Petty cash is the easily accessible small amount of money kept by a business organizations for expenditures on small items. So, petty cash book is the cash book that records the petty expenses.

The accounting system has a provision to create a separate fund to meet day to day small expenses which is known as Petty Cash Fund. Petty cash fund is the fund that is established to pay for petty expenses. The petty cashier is appointed for making small payments and recording those payments. He is given a certain sum of money and small payments are made by him.

Source: slideshare.net
Source: slideshare.net

Guidelines for Operating the Petty Cash Fund

  • Only the small expenses are paid from this fund.
  • Advance payments should not be made out of this fund.
  • Cash payment slip is prepared for payments instead journal vouchers.
  • The office in-charge should inspect the status and the operation of the fund from time to time to ensure proper utilization of the fund.
  • The amount received from staff or other persons and the cash received from any source of revenue should not be mixed up with this fund.
  • The petty cash fund should be prepared under the AGF No. 22 format.
  • The expenditures made out-up petty cash fund are not recorded in the cash book until the reimbursements for expenses are made.

Accounts Keeping for Petty Cash Expenses

  1. Cash payment slip = AGF No.6
  2. Cash reimbursement demand form = AGF No.6(A)
  3. Cash payment slip & cash receipt control form = AGF No.7
  4. Petty cash fund account = AGF No.22

1. Cash payment slip: This form is used for the payment of cash through petty cash fund.

The format of the slip is given below:

Government of Nepal AGF NO.6
………………..Office/Department/Ministry
Name of the person receiving the payment……………………………………………..
Place: ………………………………………………………………………..


Particulars

Amount

Rs.

Paisa

Total payment (in words)
Signature of the office giving approval
Signature of the office giving payment
Signature of the person receiving payment

2. Cash Reimbursement Demand Form: The petty cashier submits a statement of expenditure of the payment made by him. Along with the expenditures, the statement also prepares a cash reimbursement demand form. Reimbursement for petty cash fund expenses is made only after receiving of cash reimbursement demand form.

Government of Nepal AGF No. 6(A)
……………………..Office/Department/Ministry
REQUEST OF REIMBURSEMENT OF CASH PAYMENT

Balance on……………….As per previous reimbursement request Rs……………..
Reimbursement received on……………as per reimbursement request Rs………
Total: Rs……………

Slip No.

Particulars

Name of the person receiving payment

B.E.

Amount

Remarks

Rs.

P.

Balance Amount Rs……………….
In word…………………………………
Approved by: ………………………………………
Balance verified by: ………………………………….

For reimbursement, Request.

I have submitted the statement of expenditure incurred out of the received amount. Now, I am requesting for reimbursement of the above expenditures amounting to Rs………………………….

Submitted by…………………………………………………………… Date: ………………………………….

Approved for reimbursement by…………………………….. Date: ………………………….
Received cheque/cash of Rs……………………………….as reimbursement of above expenditure
Signature…………………………………………………………………. Date: ……………………………….

3. Cash Payment Slip Control: This form is used for controlling the cash payment slips. Payment slip control records all petty payment slip. Issued to petty cashier the format of the slip is given below:

Government of Nepal AGF No. 6(A)
……………………..Office/Department/Ministry
CASH PAYMENT SLIP AND CASH CONTROL FORM

From no …… to …….

Receiver name and position

Signature

Date

4. Petty Cash Fund Account: Petty cash fund received by the petty cashier and payment made by him are recorded in this book. The format of petty cash fund account is given below;

Government of Nepal AGF No. 6(A)
……………………..Office/Department/Ministry
PETTY CASH FUND ACCOUNT

Year

Particulars

J.V.No.

Debit

Credit

Dr./Cr.

Balance

Month

Day

Rs.

P.

Rs.

P.

Rs.

P.





References:

Sharma, Narendra et.al., Principles of Accounting-XI, Bundipuran Prakashan, Kathmandu

Koirala, Yadav Raj et.al., Principles of Accounting-XI, Asmita Books Publication, Kathmandu

Shrestha, Dasharaha et.al., Accountancy-XI, M.K. Prakashan, Kathmandu

Accounts Keeping for Petty Cash Expenses

  1. Cash payment slip (AGF No.6)
  2. Cash reimbursement demand form (AGF No.6A)
  3. Cash payment slip & cash receipt control form ( AGF No.7)
  4. Petty cash fund account (AGF No.22)
.

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