All transaction are not recorded in main cash book which are related to payments of small amount for day to day expenses of business organization .
First: It will increase the cost of maintaining books of co. and waste the time of accountant to record just petty expenses in cash book.
Second: By recording all small expenses in cash book, it may occur that very important transaction is ignored to record.
Due to above reason, accountant takes help of account clerk or assistant to record all small transaction. Account assistant records all these transaction in a small book and this book is called petty cash book.
This is prepared like main cash book. In this petty cash book all expenses are recorded only one column. This Simple petty cash book is prepared on collected receipt basis.
2. Analytical or columnar petty cash book
If any big corporate wants to all their petty expenses in petty cash book , analytical or columnar petty cash book is best option for them , because in analytical or columnar petty cash book , there is separate column of any particular expenses .
With this, accountant can know on what item what amount has be expended . To make analytical petty cash book in excel sheet is easy due to you can use Excel's large column for this purpose.
