The Petty Cash Book
This is the subsidiary book of account that is used for recording low-value (petty) cash payments (and occasional small cash receipts). These may include small incidental expense such as postages, stationery, cleaning, travelling expenses and even small cash payments to creditors

The petty cash book is similar to the Cash Book in that it serves the dual purpose of book of prime entry and since it is part of the double entry system, it is also a ledger account. Maintaining a Petty Cash Book means that it is not necessary to record small cash payments individually in either the Cash Book or the ledger. This reduces the number of entries in these books.

The task of maintaining a Petty Cash Book is often given to a junior member of staff who is given an amount of cash to act as a float from which to make small cash payments. This allows the chief cashier (main cashier) to concentrate on more important tasks and also provides valuable training for a junior member of staff. The chief cashier must check the work of the petty cashier at regular intervals.
When a member of staff wishes to obtain some petty cash, he/she should present the petty cashier with a completed and duly authorisedpetty cash voucher. This should show the purpose for which the money is required the date and the signature of the person receiving the cash. At regular intervals the petty cashier should check these vouchers against the total cash spent

The Imprest System
In most organisations, the Petty Cash Book is maintained using the imprest system. The imprestsytem operates when the main cashier gives the petty cashier enough money that is sufficient to cover petty expenses for a given period of time e.g. a week or a month. Under the system, the petty cashier starts each period (week, fortnight, month etc.) with a fixed amount of money known as the imprest amount or the cash float. During the period, payments are made out of the cash float and are recorded in the Petty Cash Book. At the end of the period, after the Petty Cash Book is balanced, the main cashier will provide the petty cashier with enough cash to restore the balance to the amount of imprest (cash float). The petty cashier therefore starts each period with the same amount of cash
Under the imprestsystem, the main cashier is aware of exactly how much petty cash has been spent in each period. The amount of the imprest can be adjusted as necessary if it is too much or not enough.

Features or Characteristics of the Imprest System
Selection of a petty cashier
A fixed sum of cash (i.e the imprest amount or cash float) will be given to the petty cashier by the main cashier
The petty cashier pays the various petty cash disbursement against duly authorised petty cash vouchers.
The main cashier reimburses the petty cashier with the total amount paid for the period thereby restoring the imprest to its original figure.

Advantages of theImprest System
The burden of the main cashier will be greatly reduced
It serves as training for young account clerks
It ensures accountability for every expenditure since all expenses are supported by documentary evidences
It helps to eliminate/discourage fraudulent practices
It reveals extravagance and items of expenditure that over-shoots the budgeted amounts
The totals of each item of expenditure can be used as a basis for making cost control decisions
Liability of the petty cashier can never exceed the imprest amount
It relives the main Cash Book and the general ledger accounts of entries of a large number of small (insignificant) items
The main cashier can exercise considerable control in that the imprest system is subject to check at any time, for the cash then in hand of the petty cashier plus the amount spent in the period according to the vouchers should always equal the cash float
Loses through the petty cashier can be minimized