Principles of Accounts: The Analytical Petty Cash Book

• Although petty cash payments are varied in nature
• In most businesses there are common items that benefit from  petty cash payments
• For example motor repair expenses, petrol expenses, employee bus fare, stationary etc
• For this reason in such businesses, the petty cash book is maintained in columnar (or analytical) form,
• with a separate column for each usual item of expense and a column for total
• This type of Petty Cash Book is known as Analytical Petty cash Book
• This type of Cash Book will allow management/proprietors to tell at a glance the total amount spent on each of these common expenses
• It also saves time posting  each item of petty payments unnecessarily in the ledger;
• As only totals of various columns are to be posted in the ledger
• An example of the ruling of an Analytical Petty Cash Book is shown below:

• Here the Receipts side acts as the Debit side of the Petty Cash Book
• The Sundry Expenses column is used to show all the other petty expenses that cannot be placed in any of the provided columns
• Sundry expenses is just a name they can be called Other Expenses, General Expenses etc
• The business decides on the name and the expenses that it will classify as Sundry Expenses or any other name the business chooses
• The corresponding entries will be found in the Cash Book and General Ledger as shown below

• The Cash and Bank balances shown above are for illustration purposes only in a real world scenario there is likely to be many other entries in the Cash Book

To access more topics go to the Principles of Accounts Notes.