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Meaning Of Petty Cash Book, Its Importance And Advantages

Meaning Of Petty Cash Book

A petty cash book is one in which all petty or small payments made through petty cash fund are recorded systematically. Petty cash book is maintained by the petty cashier. Petty cash book can be maintained either in a simple or in analytical way.

Importance And Advantages Of Petty Cash Book
Business performing a large number of petty transactions usually maintain a separate petty cash book. The following points highlight the importance and advantages of petty cash book which can be taken as its objectives as well.

* Petty cash book maintains records of all petty payments systematically.
* Petty cash book supplies information regarding petty payments made on different heads more easily and quickly.
* Petty cash book makes possible for making comparison of the petty expenses between two periods and helps in controlling such petty expenses more effectively.
* Petty cash reduces the burden of head cashier as he is not required to handle petty transactions. Hence, the head cashier will have enough time to manage and control major cash transactions more effectively.
* Petty cash book helps in making the main cash book more informative, clean and clear by including only major transactions.
* Petty cash book helps in making the records of cash transactions up-to-date because of division of labor in recording cash transactions.
Petty cash book saves time because each payment under particular head is not posted into the ledger separately. The posting is made with the periodical total at a time.

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