Petty cash book is used to record small receipts and payments, separately from regular cash book, to avoid making the work of cash book simple and less cumbersome. Petty cashier is appointed in addition to the head cashier.

The petty cashier works on the Imprest system by which, a definite sum called imprest amount, say ₹ 3,000 is given to the petty cashier at the beginning of a certain period usually one month. The petty cashier makes all small payments out of this amount and when he has spent the substantial portion of the imprest amount say ₹ 2,730, he gets reimbursement of the amount spent from the head cashier. Thus, he again has the full imprest amount in the beginning of the next period.

Format of petty Cash Book:

Dr.                                                                  Cr.              Analysis of Payments
Receipts Date Particulars Vr. No. Total Payments Stationary Postage Sundries Ledger Acts.