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Class 11
Accountancy
Recording of Transactions - 2
what is petty cash book write the advantages of p...

Question:
What is petty cash book? Write the advantages of petty cash book?

Answer:

Petty Cash Book: In every business, of whatever size, a large number of small payments such as for postage, stationery, bus fare, taxi fare, cartage etc., have to be made.These payments are generally repetitive in nature. If all these payments are made by the cashier and are recorded in the main cash book, the cashier will be overburdened with the work and the cash book will also become very bulky. To avoid this, it is usual to appoint an employee as “Petty Cashier”. He is entrusted with the task of making small payments, say, below ₹500 and records them in a separate book, called Petty Cash Book.

Advantages of Petty Cash Book

1) Saving of time and efforts of Chief Cashier
2) Easiness in Posting
3) Easiness in preparing the Cash Book
4) Control on Petty Expenses
5) Lesser chances of fraud
6) Simple Method

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Popular questions of class 11 Accountancy

Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.

From the above, answer the following :
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Question:
What is petty cash book? Write the advantages of petty cash book?

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Question:
What is petty cash book? Write the advantages of petty cash book?