A. Cash Book
D. None of These
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The correct option is A) Cash book
let’s understand what is petty cash book:
Generally, the petty cashbook is prepared as per the Imprest system. As per the Imprest system, the petty expenses for a period (month or week) are estimated and a fixed amount is given to the petty cashier to spend for that period.
At the end of the period, the petty cashier sends the details to the chief cashier and he is reimbursed the amount spent. In this way, the debit balance of the petty cashbook always remains the same.
The petty cash book has two columns in which
Balance of Petty cash book
The balance of petty cash book is never closed and their balances are carried forward to the next accounting period which is considered one of the most significant qualities of an asset whereas Income doesn’t have any opening balance and their balances get closed at the end of every accounting year.
A petty cash book is placed under the head current asset in the balance sheet. The Closing Balance of the petty cash book is computed by deducting Total expenditure from the Total cash receipt (as received from the head cashier).
Format for petty cash book
Only small denominations are recorded in the petty cash book. It varies with the type, quantity, and need of a business. It involves cash and checks.
A simple petty cash book is a type of cash book because it records the small expenses which involve small transactions in the ordinary daily business.
A petty cash book is not as important as an income statement, balance sheet, or trail balance it doesn’t measure the accuracy of accounts so it is not treated as a statement.
No journal entries are made in the books of accounts while spending or purchasing using a petty cash book so, it is not treated as a journal.