C hapter 18: The analytical petty cash

book and the imprest system

Contents of chapter
This chapter explains the need for a petty cash book, which is usually kept on an imprest system. The writing up
of a petty cash book is illustrated.

Notes for teachers

The main needs for a petty cash book are:
1
(i) To prevent the general ledger from being crowded with unnecessary details of small amounts of
cash.
(ii) To enable delegation to take place, the work of handling small cash payments being given to a more
junior member of staff.

Students should know how the imprest system works and its advantages.
2

It is also important for students to be able to draw up an analytical petty cash book correctly.
3

The use of analysis columns in the petty cash book makes it easy to calculate the totals of the various
4
expenses.

The final column is usually for ledger accounts. The total of this column is not posted to any account.
5

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Answers to MCQs and exercises
18.1 A 18.2 D 18.3 A 18.4 B 18.5 D

18.6
Petty Cash Book
Motor Postage & Cleaning Sundry Ledger Ledger
Receipts Date Details Total
expenses stationery expenses expenses folio accounts
$ 20X6 $ $ $ $ $ $
1,000 May 1 Balance b/f
" 1 Cleaning 36 36
" 3 Speedy Garage 24 24
" 4 Postage 55 55
" 5 Envelopes 17 17
" 6 Poison licence 18 18
" 8 Unique Garage 57 57
" 9 Corner Garage 64 64
" 11 Postage 58 58
" 12 F Lee 99 PL 121 99
" 13 H Ng 44 PL 168 44
" 15 Sweeping brush 23 23
" 16 Bends Garage 77 77
" 17 K Kin 65 65
" 19 Driving licences 11 11
" 21 C Hop 72 PL 15 72
" 25 Cleaning 68 68
" 27 Dog licence 12 12
" 28 Guard dog food 29 29
" 31 Corner Garage 54 54
883 287 195 127 59 215
883 " 31 Cash
" 31 Balance c/d 1,000
1,883 1,883
1,000 Jun 1 Balance b/d

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 18.7X
(a–b) Petty Cash Book
School Staff
Ledger Ledger
Receipts Date Details Total bus travelling Postage Cleaning
folio accounts
expenses expenses
$ 20X4 $ $ $ $ $ $
300 Sep 1 Cash
" 2 Petrol 16 16
" 3 T Kan 23 23
" 3 Postage 12 12
" 4 D Tong 32 32
" 7 Cleaning 11 11
" 9 Petrol 21 21
" 12 K Wong 13 13
" 14 Petrol 23 23
" 15 L Bei 5 5
" 16 Cleaning 11 11
" 18 Petrol 22 22
" 20 Postage 12 12
" 22 Cleaning 11 11
" 24 H Woo 7 7
" 27 T Chen 13 PL 18 13
" 29 Postage 12 12
244 82 80 36 33 13
244 " 30 Cash
" 30 Balance c/d 300
544 544
300 Oct 1 Balance b/d

(c) General Ledger

School Bus Expenses
20X4 $
Sep 30 Petty cash 82

Staff Travelling Expenses

20X4 $
Sep 30 Petty cash 80

Postage
20X4 $
Sep 30 Petty cash 36

Cleaning
20X4 $
Sep 30 Petty cash 33

Purchases Ledger
T Chen (page 18)
20X4 $
Sep 27 Petty cash 13

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18.8
(a) Petty Cash Book
Travelling Miscellaneous
Receipts Date Details Total Postage Stationery Entertainment
expenses expenses
$ 20X5 $ $ $ $ $ $
315 Sep 1 Balance b/f
1,685 " 1 Cash
" 1 Postage stamps 84 84
" 3 Newspapers 15 15
" 6 Dinner: entertaining 420 420
customers
" 10 Repairs to furniture 160 160
" 12 Parcel sent by UPS 188 188
" 15 Plastic files 51 51
" 17 Note pads 24 24
" 18 Daniel: taxi fares 73 73
" 20 Donation to Red Cross 100 100
" 23 Office cleaning 215 215
" 24 Flora: bus fares 19 19
" 26 Registered letters 28 28
" 28 Ball pens 40 40
" 30 Show tickets: 236 236
entertaining
customers
1,653 300 92 115 656 490
" 30 Balance c/d 347
2,000 2,000
347 Oct 1 Balance b/d
1,653 " 1 Cash

(b) General Ledger

Postage
20X5 $
Sep 30 Petty cash 300

Travelling Expenses
20X5 $
Sep 30 Petty cash 92

Stationery
20X5 $
Sep 30 Petty cash 115

Entertainment
20X5 $
Sep 30 Petty cash 656

Miscellaneous Expenses
20X5 $
Sep 30 Petty cash 490

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 18.9X
(a) See Section 18.3.

(b) Petty Cash Book

Travelling Telephone Motor Sundry Ledger
Receipts Date Details Total Stationery
expenses expenses expenses expenses accounts
$ 20X4 $ $ $ $ $ $ $
169 Nov 1 Balance b/f
1,331 " 1 Cash
" 1 IDD 31 31
" 3 A4 Paper 150 150
" 4 Photocopy 22 22
" 6 Ben: Train tickets 34 34
" 7 Magazine 15 15
" 10 C Tang 43 43
" 12 Joe: Bus fare 18 18
" 13 Petrol 120 120
" 14 Water charges 24 24
" 15 Ball pens 16 16
" 17 Cleaning for 135 135
Company car
" 18 IDD 69 69
" 20 Electricity bill 145 145
" 22 Petrol 120 120
" 24 Telephone bill 90 90
" 27 Angela: Taxi fare 86 86
" 29 K Wong 78 78
" 30 Motor oil 50 50
1,246 166 138 190 425 206 121
" 30 Balance c/d 254
1,500 1,500
254 Dec 1 Balance b/d
1,746 " 1 Cash

(c) Cash Book (Bank)

20X4 $
Nov 1 Petty cash 1,331
Dec 1 Petty cash 1,746
General Ledger
Stationery
20X4 $
Nov 30 Petty cash 166

Telephone Expenses
20X4 $
Nov 30 Petty cash 190

Sundry Expenses
20X4 $
Nov 30 Petty cash 206

Travelling Expenses
20X4 $
Nov 30 Petty cash 138

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 Motor Expenses
20X4 $
Nov 30 Petty cash 425

Sales Ledger
C Tang
20X4 $
Nov 10 Petty cash 43

K Wong
20X4 $
Nov 29 Petty cash 78

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