JSS2 Third Term Business Studies Lesson Note – Book Keeping: Petty Cash Book

The content is just an excerpt from the complete note for JSS2 Third Term Business Studies Lesson Note – Book Keeping: Petty Cash Book. Check below to download the complete DOCUMENT

JS 2 (BASIC 8)

WEEK 1: 

BOOK KEEPING: Petty Cash Book

Preview

1. Book keeping – petty cash book: meaning of petty cash book,
2. preparation of petty cash book,
3. Imprest system – petty cash, refinement and reimbursement.

Full Content

PETTY CASH BOOK

This is used to record small expenses such as postage stamps, envelops, transport fares, newspapers, stationery and other small items needed in the office. The word ‘petty’ means small. We cannot pay for them with cheques because they are too small. It is also a book of original entry and also a ledger account for petty cash. The cost of each of the small items is recorded in the petty cash book instead of the ledger. The total expenses are transferred to the ledger as a petty cash account.

Columns in a Petty Cash Book

DEBIT SIDE

1. Amount
2. Date
3. Particulars of expenses
4. Voucher number
5. Total amount

CREDIT SIDE

On the credit side we have the analysis of expenses of a ledger account. This has different columns for different expenses e. g stationery, postage, transport, etc.

Recording of Receipts and Payments in Petty Cash Book

1. The credit entry is made in the cash book
2. The debt entry is made in the petty cash book
3. The entries on the credit side of the petty cash book are first made in the total column and then, extended into the relevant expenses column,
4. The expenses columns have various headings for different expenses,
5. The last column of the petty cash book is known as a ledger account.

Preparation of a Petty Cash Book

Example

To gain full access to the note: DOWNLOAD FILE