The analytical petty cash book and the imprest system

1. The analytical petty cash book and the imprest system Chapter 18

2. Petty cash Not important A book of original entry, where small, usually insignificant amounts of money are recorded. Such as travel expenses for employees, postage expenses hospitality. We now know 6 books of original entry: Cash book Sales day book Purchase day book Returns inwards Returns outwards Petty Cash

3. Why do we use a petty cash book? If all small cash payments were entered in to the cash book, then there would be too many insignificant entries, for example if the company paid for traveling expenses for each employee, then over the year there would be approximately 250 entries per employee. However if the petty cash book is used, we would put one entry per month, reducing the entries from 250 to 12 per year.

4. The imprest system For example, the petty cashier will keep £150 in her in her draw. The employee will complete a petty cash form and give it to the petty cashier with any receipts as proof. The petty cashier will reimburse the employee The cashier will make sure the petty cashier has £150, and will ‘top-up’ usually monthly. employee Petty Cashier Cashier

5. The _____________ cash book is used to record transactions involving small items of __________ incurred by a member of staff on behalf of the business. The _______ system is the name given to the process of the petty cash system. The money (________) is given to the petty cashier from the _______ at the start of each month. The employee gives a petty cash slip and _________ of expenses to the petty cashier. The petty cashier __________ the monies. At the end of the month, the cashier gives the petty cashier money to restore the value of the petty _________ book. At the end of the month the petty cash book is balanced off, and posted in to the _________ ledger. proof / petty / imprest /expenditure / cashier / cash / float / reimburses / general

6. Questions Complete 18.1 & 18.2 Page 209