Analytical Cash Receipts and Cash Payments Books

The Performa of analytical cash receipts and cash payments books relating to the insurance business appears in this page. Any business can modify suitably the proforma depending upon its own requirements.

Petty Cash Book

Every business has to make payments involving smaller or petty amount, eg. carriage, cartage, cooly hire, postage telegrams etc. Such payments, by their very nature can not be made by cheques. It is usual for the business units to maintain a separate cash book to record small payments only. Such cash book is known as Petty Cash Book. It relieves the main cash book of numerous transactions involving petty sums and also helps in reducing the work-load of chief cashier.

Imprested System

Under this method, petty cashier is provided with a fixed amount of money known as imprested or float which is sufficient to meet the needs of balancing period. Balancing period may be a week or fortnight or month. At the end of balancing period the petty cashier is given fresh cheque of the amount equal to his payments during the same period. Thus, in the beginning, every time, he will start with the amount fixed: ie imprested or float.

Usual method of maintaining petty cash book is to rule it for obtaining analysis of expenditure. The book will have one column on the debit side to record receipt of cash (only from the main cashier) and credit side is divided into different columns. Each column is reserved for one particular type of expenditure. Name and number of columns in each case will depend upon the requirements of the business.


(1) Reduces the work load of chief cashier.

(2) Effective control can be exercised over small payments because each payment has to be supported by vouchers and vouchers are examined frequently ie. at the end of each balancing period.

(3) Saving in labor because each payment is not required to be posted in the ledger separately.

Accounting Treatment

The periodical cheques drawn for petty cash are entered on the credit side of the cash book and debited to Petty Cash A / c in the ledger. Such amount shall also be entered on the debit side of the Petty Cash Book (for memorandum purposes). At the balancing period the Petty Cash Book will be analyzed under the different columns provided in it. For each column provided init (except ledger and miscellaneous columns) one nominal account is opened in the ledger. Each expense account or nominal account will be debited and Petty Cash Ale will be credited. This should be done by means of journal entry. Reason is that here petty cash book is considered to be a memorandum book only.

Analytical or Columnar Petty Cash Book

While recording the transactions in petty cash book if all the expenses are analyzed and entries are recorded in cash book on the basis of this analysis. such petty cash book is called 'analytical petty cashbook'. For recording the expenses in this book, whole of the petty expenses are classified into few 'heads' and a decision is taken as to which of the petty expenditure is to be recorded under which head. All expenses are recorded in the books according to the decision. The description of each expenditure is recorded in particulars column but the head of expenditure recorded in separate columns. At the end of period this petty cash book is balanced in the same manner as in case of simple petty cash book.