A petty cashier receives ₹1,000 to handle small everyday payments. Pens, postage, telegrams and carriage charges are all part of the job. But then the expense list arrives—and the first item is already ₹1,400!
This is where accounting detective work begins. A Petty Cash Book helps record and classify small payments, but the cashier cannot spend more money than is available. Let’s organise the transactions and discover what the figures reveal.
Petty Cash Book — August
Imprest amount: ₹1,000
| Date | Particulars | Total paid (₹) | Wages (₹) | Stationery (₹) | Carriage (₹) | Postage (₹) | Telegrams and telephone (₹) | Sundry expenses (₹) |
|---|---|---|---|---|---|---|---|---|
| Aug. 1 | Peon’s wages | 1,400 | 1,400 | — | — | — | — | — |
| Aug. 3 | Pencils and pens | 70 | — | 70 | — | — | — | — |
| Aug. 8 | Carriage on goods | 230 | — | — | 230 | — | — | — |
| Aug. 10 | Postage stamps | 135 | — | — | — | 135 | — | — |
| Aug. 12 | Telegrams and telephones | 210 | — | — | — | — | 210 | — |
| Aug. 16 | Sundry expenses | 900 | — | — | — | — | — | 900 |
| Total | 2,945 | 1,400 | 70 | 230 | 135 | 210 | 900 |
Step 1: Add the expenses
Total expenses:
₹1,400 + ₹70 + ₹230 + ₹135 + ₹210 + ₹900 = ₹2,945
The analysis columns add up to the same amount:
₹1,400 + ₹70 + ₹230 + ₹135 + ₹210 + ₹900 = ₹2,945
This agreement confirms that every listed payment has been classified and included in the total.
Step 2: Check the imprest amount
The imprest amount is ₹1,000, but the expenses are ₹2,945.
Excess of expenses over imprest:
₹2,945 − ₹1,000 = ₹1,945
The expenses exceed the original fund by ₹1,945. In fact, the very first payment of ₹1,400 is already ₹400 more than the entire imprest amount.
Therefore, the figures cannot describe a fully funded petty cash book using only the stated ₹1,000 float. The business must have provided additional cash, or the question may contain an error or missing information. We should not invent a cash balance to make the figures appear correct.
The final lesson
A Petty Cash Book records small payments and groups them into expense categories. Under the imprest system, the petty cashier receives a fixed fund, spends from it and is reimbursed for the amount spent. The fund must be adequately supplied to cover the payments actually made.
Exam memory line: Total petty expenses are ₹2,945, but a ₹1,000 imprest alone cannot cover them; check for additional funds or a possible error in the question.
