Chapter 9: Petty Cash Book

Question 1

What does the petty cash book record?

Answer 1

Low-value CASH payments

For small purchases and expenses

Incurred by a business.

Question 2

Which side are petty cash receipts recorded on?

Answer 2

Debit side (Left side)

Question 3

Which side are payment recorded on?

Answer 3

Credit side (Right Side)

Question 4

Egs of transactions recorded in the petty cash book?

Answer 4

1. Stationery items
2. Small items of office supplies.
3. Casual wages
4. Window cleaning
5. Bus, rail and taxi fares
6. Meals & drinks incurred on behalf of the business
7. Postages
8. Tips & donations.

Question 5

Who controls the petty cash book?

Answer 5

The petty cashier controls the petty cash book.

Question 6

How do they write up the petty cash book?

Answer 6

The petty cashier writes up the petty cash book from petty cash vouchers.

Which are analysed under various expense headings.

Question 7

How often is the data from the completed petty cash book transferred to the general ledger?

Answer 7

At regular intervals

weekly or monthly

Question 8

What happens when the data from the completed petty cash book transferred to the general ledger?

Answer 8

The total of each analysis column is debited to the relevant account.

Question 9

What can the petty cash book combine the roles of?

Answer 9

Petty cash book may combine the roles of:

1. Book of prime entry for low-value cash payments
2. Double-Entry account for petty cash

Question 10

What happens when the petty cash book is used only as the book of prime entry?

Answer 10

A petty cash control account is used in General Ledger to complete double-entry book-keeping.