Glossary
Petty cash book
A record of small everyday cash payments.
What it means
A book of prime entry recording low-value cash payments, often operated on the imprest system.
Example
Buying stamps or tea for the office is recorded in the petty cash book.
Why it matters
It keeps small payments out of the main cash book and controls minor spending.
In practice
The petty cash book records small payments. It is usually run on the imprest system, where the cashier starts each period with a fixed float, say RM200. Each payment, such as postage, cleaning or refreshments, is entered and analysed into columns by type of expense. At the period end, the amount spent is reimbursed to restore the float to RM200.
For example, if RM145 has been paid out, RM145 is drawn from the main cash book to top the float back up. The analysis column totals are then posted to the relevant expense accounts in the ledger.
Students often confuse it with the main cash book. The cash book handles larger receipts and payments and the bank. The petty cash book keeps minor items separate and controlled, so small spending is still accounted for.
If imprest questions confuse you, one of our teachers can work through a full petty cash example with you. Book a trial class.
Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 2.3 Books of prime entry (page 12).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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