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record the following transaction in petty cash book with suitable colums.the book is kept on imprest system,amount of imprest being Rs 4,000
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Petty Cash Book

Introduction to Accounting

Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business. It provides information about the financial position, performance, and cash flows of an organization. Petty cash book is a subsidiary book used to record small, day-to-day cash transactions. It helps in maintaining proper control over small cash expenditures.

Imprest System

Imprest system is a method of maintaining petty cash. Under this system, a fixed amount of cash is given to a designated person, known as the petty cashier, to meet small expenses. The petty cashier is responsible for recording all cash transactions in the petty cash book. At regular intervals, the petty cashier is reimbursed with the same amount to bring the cash balance back to the initial imprest amount.

Petty Cash Book Columns

The petty cash book typically consists of the following columns:

1. Date: The date on which the transaction occurred.
2. Petty Cash Voucher No.: A unique number assigned to each petty cash voucher.
3. Particulars: A brief description of the purpose or nature of the expenditure.
4. Amount: The amount of cash disbursed.
5. Receipt No.: If any receipt is obtained for the expenditure, the receipt number is recorded here.
6. Balance: The remaining amount of cash in the petty cash box after each transaction.
7. Remarks: Any additional remarks or comments related to the transaction.

Recording the Transaction

In this case, let's assume that an amount of Rs 4,000 has been given as an imprest to the petty cashier. The transaction to be recorded is as follows:

Date: [Date of the transaction]
Particulars: [Description of the expenditure]
Amount: [Amount disbursed]
Receipt No.: [If applicable]

To record the transaction in the petty cash book, follow these steps:

1. Open the petty cash book and enter the initial imprest amount of Rs 4,000 in the balance column.
2. Record the date of the transaction in the date column.
3. Write a brief description of the expenditure in the particulars column.
4. Enter the amount disbursed in the amount column.
5. If a receipt is obtained for the expenditure, record the receipt number in the receipt no. column.
6. Calculate the remaining balance by deducting the amount disbursed from the previous balance.
7. Write any additional remarks or comments related to the transaction in the remarks column.

Repeat these steps for each transaction made from the petty cash box, ensuring that the balance is always updated after each transaction.

Conclusion

The petty cash book is an essential tool for managing small cash expenditures in a business. By maintaining proper records of these transactions, businesses can ensure transparency, accountability, and control over cash handling. The imprest system helps in maintaining a fixed amount of cash, ensuring that the petty cashier is reimbursed regularly, and the petty cash box remains adequately funded.
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record the following transaction in petty cash book with suitable colums.the book is kept on imprest system,amount of imprest being Rs 4,000 Related: Introduction to Accounting?
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record the following transaction in petty cash book with suitable colums.the book is kept on imprest system,amount of imprest being Rs 4,000 Related: Introduction to Accounting? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about record the following transaction in petty cash book with suitable colums.the book is kept on imprest system,amount of imprest being Rs 4,000 Related: Introduction to Accounting? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for record the following transaction in petty cash book with suitable colums.the book is kept on imprest system,amount of imprest being Rs 4,000 Related: Introduction to Accounting?.
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