Petty Cash Book is used for recording payment of petty expenses, which are of smaller denominations like postage, stationery, conveyance, refreshment, etc. Person who maintains petty cash book is known as petty cashier and these small expenses are termed as petty expenses.
It is prepared by two methods: Ordinary system: In this case, a fixed sum or money is paid to petty cashier for the payment or petty expenses and after spending the whole amount, the account is submitted by the petty cashier to the main cashier.
Imprest system: In this case, a fixed sum ot the money given to the petty cashier in the beginning of a period and at the end of the period the amount spent by him is reimbursed, so that he has a fixed amount in the beginning of every new period.