How to prepare a Petty cashbook

 How to prepare a Petty cashbook

Petty cash book preparation in one of the simplest task a student may be asked to do, however most learners do not know how to prepare it. Most business have no idea of what a petty cashbook is and those who know barely maintains one. 

To prepare a petty cash book, you begin by recording the opening float and documenting every subsequent payment supported by a voucher. You then classify these expenses into specific analysis columns—such as postage, stationery, or transport—while directing payments for creditors to the personal ledger column. This systematic process concludes with calculating the closing balance to facilitate accurate reimbursement and reconciliation.

When teaching this topic, I make sure my trainees identify the two petty cashbook problems i.e

a)       Petty cashbook using imprest system

b)      Petty cashbook without imprest system.

Petty cashbook without imprest system.

Every accounting trainee knows that the most important part of financial statement is to understand the Format.

The table below is a format of a petty cashbook.

Receipt	Date	Details	Amount	Analysis column				The
				Exp.1	Exp.2	Exp.3	Exp.4	Ledger
Funds in	(Date)	description	Total out	Eg. travel	Eg. office	Eg. postage	Eg. stationery

Illustration

Greenfield Supplies keeps a petty cash book using the non-imprest system.
On 1 August 2024, the petty cashier had a cash balance of Ksh 50,000.

During the month of August 2024, the following petty cash transactions occurred:

·         Aug 2 – Paid Ksh 9,600 for cleaning services

·         Aug 4 – Paid Ksh 1,200 for postage

·         Aug 6 – Paid Joseph, a creditor, Ksh 6,500

·         Aug 8 – Purchased printing paper for Ksh 1,100

·         Aug 11 – Bought tea and snacks for staff costing Ksh 1,750

·         Aug 14 – Paid Ksh 2,300 for taxi services

·         Aug 17 – Purchased office tools for Ksh 4,200

·         Aug 20 – Bought files and envelopes for Ksh 3,400

·         Aug 23 – Paid Ksh 4,800 for milk supply

·         Aug 25 – Bought cleaning materials for Ksh 900

·         Aug 27 – Paid Ksh 2,600 for bus fare

·         Aug 29 – Purchased airtime worth Ksh 1,350

Required

Prepare a petty cash book showing the following analysis columns:

·         Cleaning

·         Staff refreshments

·         Communication and stationery

·         Travel

·         Ledger                                                                                                         (10 marks)

Worked Solution

GREENFIELD SUPPLIES

PETTY CASHBOOK FOR THE MONTH OF AUGUST 2024

Receipt	Date	Details	Amount	Analysis column				The
				Cleaning	Staff refreshment	Communication and stationery	Travel	Ledger
50,000	1/8/24	Receipt	-
	2/8/24	Cleaning	9600	9600
	4/8/24	Postage	1200			1200
	6/8/24	Joseph	6500					6500
	8/8/24	Printing	1100			1100
	11/8/24	Tea &Snack	1750		1759
	14/8/24	Taxi	2300				2300
	17/8/24	Tools	4200	4200
	20/8/24	Files	3400			3400
	23/8/24	Milk	4800		4800
	25/8/24	Cleaning	900	900
	27/8/24	Bus	2600				2600
	29/8/24	Airtime	1350			1350
		Total	42300	14700	6550	7050	4900	6500
	31/8/24	Balance c/d	7700
50000			50000

 

Try out the question below to assess self and comment your answer

Self-Assessment Questions

Safari Traders maintains a petty cash book under the non-imprest system.
On 1 July 2024, the petty cashier had a cash balance of Ksh 60,400.

During the month of July 2024, the following petty cash transactions took place:

July 2 – Paid Ksh 14,800 for cleaning services

July 4 – Paid Ksh 1,350 for postage

July 6 – Paid Amina, a creditor, Ksh 6,900

July 9 – Purchased printing paper for Ksh 1,200

July 11 – Bought tea and snacks for staff costing Ksh 1,750

July 14 – Paid Ksh 2,450 for taxi services

July 18 – Purchased office cleaning tools for Ksh 4,800

July 21 – Bought files and envelopes for Ksh 3,600

July 24 – Paid Ksh 5,400 for milk supply

July 26 – Bought cleaning materials for Ksh 1,100

July 28 – Paid Ksh 3,950 for bus fare

July 30 – Purchased airtime worth Ksh 1,500

Required

Prepare a petty cash book showing the following analysis columns:

·         Cleaning

·         Office expense

·         stationery

·         Travel

·         Ledger

 

Check out notes: How to prepare a petty cash book applying IMPREST principal on our Next Post.