Petty cash
What is petty cash?
Petty cash is a small amount of notes and coins kept for small costs, such as stamps or milk.
A voucher is filled in for every payment out of the tin.
Petty cash is an asset, just as money in the bank is.
Example
A petty cash tin starts the week with £100.00. During the week £37.50 is paid out for stamps and milk. The tin now holds £62.50 in cash and vouchers for £37.50.
Why it matters
It is for small costs where a bank payment would be more trouble than it is worth. The vouchers show where every pound went.
Practise it
Module, 5 rooms, PremiumPetty cash
Practise it nowThe cash book and petty cash
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].