Petty cash
Petty cash (alternatively known as petty cash fund; hereinafter, the Fund) is fund or source that allows payment of small amounts without the writing of checks. In physical form, the Fund can represent a petty cash box. In electronic form, the Fund can represent a petty cash card.
A legal entity can keep cash in a safe place for the purpose of making small purchases like milk, stamps, pens etc. The Fund is monitored carefully by the bookkeeper. All money paid out of a petty cash box must be recorded in the petty cash book or using petty cash vouchers so that the expenses can be included in the accounts, and when the cash runs low it will be topped up with an injection of more cash.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Petty cash fund. Fund (source) that allows payment of small amounts without the writing of checks.
Related concepts
- Bookkeeping. Recording, filing, and retrieving of financial data, as well as producing those financial reports that are required by laws.
