Petty Cash Book

What is the primary purpose of a petty cash book?

• To record sales transactions
• To manage employee salaries
• To track small, everyday expenses
• To track large business expenses

Which of the following is a typical expense recorded in a petty cash book?

• Rent payments
• Office supplies
• Employee salaries
• Utility bills

If a business spends $50 on office supplies and $20 on coffee for meetings, how much should be recorded in the Cash Out section?

• $30
• $70
• $50
• $20

What can be inferred about a business that does not keep track of petty cash expenses?

• It does not use petty cash at all
• It is likely to have high profits
• It may struggle with budgeting and financial accuracy
• It has a strong financial management system

In what way does using a petty cash book differ from other financial record-keeping methods?

• It simplifies tracking small expenses
• It requires no documentation
• It is only for large transactions
• It is used for payroll management

What are the two main sections of a petty cash book?

• Income and Expenses
• Assets and Liabilities
• Cash In and Cash Out
• Debits and Credits

How does a petty cash book help with budgeting?

• By tracking large investments
• By showing where small expenses are going
• By eliminating all expenses
• By increasing cash flow

What is a best practice for managing a petty cash book?

• Only use cash for large purchases
• Avoid tracking petty cash expenses
• Keep receipts for every expense
• Reconcile the book once a year

How can a business ensure its petty cash records are accurate?

• By only using electronic payments
• By reconciling the petty cash book regularly
• By ignoring small expenses
• By keeping the petty cash fund empty

Why is it important to keep receipts for petty cash transactions?

• To maintain accurate records
• To impress the accountant
• To track large purchases
• To avoid paying taxes