Definition of Petty Cash
Petty cash or a petty cash fund is a small amount of money available for paying small expenses without writing a check. Petty Cash is also the title of the general ledger current asset account that reports the amount of the company's petty cash. The amount of petty cash will vary by company and may be in the range of $30 to $300.
The petty cash is controlled through the use of a petty cash voucher for each payment made. The expenses will be recorded in the company's general ledger expense accounts when the petty cash on hand is replenished.
Examples of Petty Cash Payments
Some examples of small payments made from petty cash include:
- Paying the mail carrier 30 cents for the postage due on a letter
- Reimbursing an employee $9 for supplies purchased
- Reimbursing an employee for purchasing $14 of bakery goods for an early morning meeting