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What is petty cash?

Author:
Harold Averkamp, CPA, MBA

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
What is petty cash?

Shown above is an example of a petty cash voucher.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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