What Is Petty Cash Book?
Introduction
A petty cash book is a financial record that tracks small, frequent cash transactions that are below a predetermined threshold. These transactions are often for minor expenses such as office supplies, postage, or travel expenses.
Maintaining a petty cash book is essential for businesses to keep accurate records of these small expenses and ensure that they are used for legitimate business purposes.
Benefits of Keeping a Petty Cash Book
There are several advantages to maintaining a petty cash book:
- Accurate record keeping: A petty cash book provides a centralized record of all petty cash transactions, making it easy to track expenses and prevent misuse of funds.
- Expense control: By setting a predetermined threshold for petty cash transactions, businesses can control and monitor small expenses, preventing overspending.
- Audit trail: A well-maintained petty cash book serves as an audit trail, providing a clear record of transactions for auditors or inspectors.
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