Q.On 1st June 2022, ₹ 2,000 was given to the petty cashier. He had spent ₹ 1,880 during the month. How much amount was received by the petty cashier from cashier on 30th June 2022 and how much is the opening cash balance on 1st July 2022 ?

Small payments are recorded in the Petty cash book — option (d).

Why a petty cash book?

• A business makes many small payments daily — postage, carriage, stationery, refreshments, conveyance. Recording each of these in the main cash book would overload it.
• These small payments are therefore recorded separately in the Petty cash book, kept by a petty cashier. …

Small payments are recorded in the Petty Cash Book.

Every business makes many small, repetitive payments — postage, carriage, stationery, conveyance, refreshments, etc. Recording all of these in the main cash book would make it bulky. So they are entered in a separate book called the Petty Cash Book, maintained by a petty cashier, commonly under the imprest system (the petty cashier is given a fixed float which is reimbursed by the amount spent).

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