In business studies one of the major topics you can come across is the study of the functions of petty cash book and its importance in the area of buying and selling.
So in order to give you the details on how petty cash book works, i decided to use my blog as a means of communicating with you on this, knowing fully well that petty cash book is one of the topics in business studies for junior secondary three (JSS3). I now have to give out the importance as well.
Giving out the importance and definitions will help you cover all your assignments as a student in the secondary school level or tertiary level, whenever you are in need of answers on the use of petty cash book.
Definition Of a Petty Cash Book
The definition of a petty cash book in business studies has been made easy for you to read and understand, using a lay man understanding.
A petty cash book is a document in which your daily expenditures are being calculated at the end of the day. Petty cash books can also be defined as a book in which petty expenses which are very numerous are now grouped under one word or category in order to calculate all the expenses being made in a week or in a month.
Examples of a Petty Cash Book Format
This content won't be complete without consisting the calculation format of a petty cash book.
When using a petty cash book expenditures are grouped under the following pattern below;
E.g
Stationary:
ink, pencil, biro, envelopes, etc
Transport:
Taxi fare, train fair, bus fare etc
Postages:
Stamps, telegrams, parcel, express mail service etc.
As you can see, the format above is how a petty cash book is been summarized. Then lets look at the importance.
Importance of a Petty Cash Book
In this blog post am going to be giving out 3 importance of a petty cash book. This 3 importance will go a long way in helping you as a student as questions in your test and examination.
1. The petty cash book format of calculations helps the cashier to keep accurate transactions and expenditures in the company.
2. The second importance of a petty cash book is that it allows payments for minor expenses.
3. And lastly, before i conclude. The format of the petty cash book simplifies the accounting role of the petty cashiers and so on.
Conclusion
Having talked on petty cash book next time we are going to be looking at petty cash vouchers.
