What Is Petty Cash?
Petty cash can be defined as a small amount of money, which is readily available on hand, and such funds are used to make a few payments owed. This mode of payment is easy to use as compared to make small payments through writing a check. Petty cask is also known as the petty cash fund, and the person in charge is called petty cash custodian (Orwin, & Kersey, 2016) .
How petty cash is used
Petty cash is used both for large and small business to reduce the burden of main cashbook which is used to make large payments. Within an organization, there are transactions which are relatively small which can only be best managed through pretty cashbook (Orwin, & Kersey, 2016) . The chief cashier appoints a petty cashier who is in charge of the petty cash book. The petty cashier is allocated a sum of money, which he/she uses to manage small petty expenses for a fixed period (Orwin, & Kersey, 2016) .
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How One Might Operate Petty Cash
Using petty cash book requires that one understand two types of entries, which are made when using the cashbook. The first entry made is the debit record, which is the cash, received by the pretty cash clerk from the chief cashier. Similarly, the second entry made on the petty cash is the credit, which shows cash withdrawals from the petty cash clerk (Orwin, & Kersey, 2016) . Credit entries can be as a result of making small payments such as meals, stamps, flowers, and office suppliers among others. When the amount of cash in hand declines because of withdrawals due to various expenditure, the petty cash clerk obtain additional cash from the chief cashier (Orwin, & Kersey, 2016) .
References
Orwin, C. S., & Kersey, H. W. (2016). Estate Accounts . Cambridge University Press.
