Petty Cash Book: Imprest, Reimbursement and Solved Format

Your petty cashier starts with Rs 3,000, spends Rs 1,840 and has Rs 1,160 left. How much should the head cashier give them for the next period?

Rs 1,840. The aim is to bring the cash back to Rs 3,000. Giving another Rs 3,000 would leave Rs 4,160 in the box.

That small distinction is the heart of the imprest system of petty cash. Once it clicks, reimbursement questions become much easier. The analytical columns simply explain where the money went.

Let’s build a complete example, balance it, and then change the conditions to see when the usual shortcut stops working.

What is a petty cash book?

A petty cash book records small payments handled by a petty cashier, such as office bus fares, postage and stationery. It keeps these frequent items out of the head cashier’s detailed day-to-day work.

Under the imprest system, the petty cashier receives an agreed fund. After supported payments are checked, the head cashier restores the fund to its authorised amount. This replenishment may happen weekly, fortnightly or monthly.

An analytical petty cash book also groups payments into columns, such as Postage, Stationery and Conveyance. The columns make it possible to see the total spent on each purpose.

These features are described in NCERT’s Recording of Transactions II, Section 4.1.3.

Imagine a box with a fill line. Spending lowers the cash below the line. Reimbursement fills the gap. It does not mean pouring in a whole new boxful every time.

Four amounts you must keep separate

Use the opening example to label each number:

Amount	Meaning	Example
Authorised imprest	Agreed amount to restore	Rs 3,000
Payments during the period	Cash used for recorded payments	Rs 1,840
Closing cash before replenishment	Money still available	Rs 1,160
Reimbursement	Cash needed to restore the imprest	Rs 1,840

The arithmetic is:

Closing cash = Opening cash + Additional receipts - Payments

Cash required to restore the fund = Target imprest - Cash available

If a period starts with the full imprest, there are no extra receipts or discrepancies, and the target stays unchanged, reimbursement equals that period’s payments.

The second formula is safer whenever the wording changes. It asks you to compare the money actually available with the amount required next.

How to read the analytical columns

A typical book includes a receipt amount, date, particulars, voucher number, total payment and several analysis columns.

For the illustration below, we will use four analysis headings:

• Postage: stamps and courier charges.
• Stationery: pens, paper and files.
• Conveyance: local travel for office work.
• Other: small office expenses without a separate column in this question.

Use the headings specified in your question. If it gives a separate Courier column, use that instead of putting courier charges under Postage.

The NIOS Cash Book lesson illustrates how individual payments appear in both a total-payment column and the relevant analysis column, while cash received is recorded separately.

Why does one payment appear twice?

Suppose the petty cashier pays Rs 145 for bus fare on an office errand.

Write Rs 145 in Total paid and Rs 145 in Conveyance. The business has paid Rs 145, not Rs 290. One entry measures the payment; the other classifies it.

Think of a shopping receipt: its total is Rs 500, and its item lines also add to Rs 500. You do not add the receipt total to its own breakdown.

Can one voucher belong to two columns?

Yes. Suppose one voucher supports Rs 90 for envelopes and Rs 60 for stamps, and the question classifies envelopes as Stationery.

Record total paid of Rs 150, with Rs 90 under Stationery and Rs 60 under Postage. Do not put the full Rs 150 into both columns.

Solved analytical petty cash book

Meera is the petty cashier of Maple Office Services. She receives an imprest of Rs 3,000 on 1 September. During September, she makes these payments:

1. 2 September: postage stamps, Rs 180.
2. 4 September: office pens and files, Rs 320.
3. 7 September: bus fare for an office errand, Rs 145.
4. 10 September: courier charges, Rs 125.
5. 13 September: drinking water for the office, Rs 110.
6. 17 September: printer paper, Rs 260.
7. 21 September: auto fare for office work, Rs 240.
8. 25 September: minor repair to an office stapler, Rs 160.
9. 28 September: postage stamps, Rs 90.
10. 30 September: refreshments for an office meeting, Rs 210.

Prepare the book, find the closing cash and show reimbursement on 1 October. Assume no other receipts, no cash discrepancy and no change in imprest. Treat drinking water, the stapler repair and refreshments as Other expenses for this exercise.

Step 1: Record the payments and their analysis

All amounts below are in rupees. Voucher numbers 1 to 10 match the dated transactions above. The compact headings mean P = Postage, S = Stationery, C = Conveyance and O = Other. In your handwritten book, use the full headings and include Date and Particulars alongside the voucher number.

Voucher	Paid	P	S	C	O
1	180	180	-	-	-
2	320	-	320	-	-
3	145	-	-	145	-
4	125	125	-	-	-
5	110	-	-	-	110
6	260	-	260	-	-
7	240	-	-	240	-
8	160	-	-	-	160
9	90	90	-	-	-
10	210	-	-	-	210
Totals	1,840	395	580	385	480

For readability, the receipt and balancing lines appear separately below. In a handwritten answer, place them in the same analytical book, using its receipt and total-payment columns. They do not belong in the expense analysis columns.

Step 2: Add and cross-check the columns

Postage = 180 + 125 + 90 = Rs 395.

Stationery = 320 + 260 = Rs 580.

Conveyance = 145 + 240 = Rs 385.

Other = 110 + 160 + 210 = Rs 480.

Now check:

395 + 580 + 385 + 480 = Rs 1,840

This equals the Total paid column. If your totals disagree, look for a payment placed in two analysis columns or one left unclassified.

Step 3: Balance the cash columns

Cash remaining = 3,000 - 1,840 = Rs 1,160.

Date	Particulars	Receipts	Total-payment side
1 September	Cash received from head cashier	3,000	-
September	Payments detailed above	-	1,840
30 September	Balance c/d	-	1,160
	Totals	3,000	3,000
1 October	Balance b/d	1,160	-
1 October	Reimbursement received	1,840	-

The September payments row is a summary of the detailed table, not an extra transaction to copy below those ten payments.

Balance c/d closes the September cash columns. Balance b/d brings the same cash into October.

After reimbursement, Meera has:

Rs 1,160 + Rs 1,840 = Rs 3,000.

Step 4: Check the timing

Here, reimbursement occurs on 1 October. September therefore closes with Rs 1,160.

If the question instead says Meera receives reimbursement on 30 September before the book is balanced, record that receipt on 30 September. The closing cash after replenishment would then be Rs 3,000.

Follow the stated date. Moving a receipt into the wrong month changes the closing balance even when the spending calculation is correct.

Posting the petty cash book to the ledger

Under the treatment illustrated in NCERT, Petty Cash Account is debited for funds received and credited for payments. Expense accounts are debited with their respective totals. The balance represents cash held by the petty cashier.

For our example, the accounting effects are:

When the initial fund is provided:

Petty Cash A/c Dr. Rs 3,000
To Cash A/c Rs 3,000

When September’s expense totals are posted:

Postage A/c Dr. Rs 395
Stationery A/c Dr. Rs 580
Conveyance A/c Dr. Rs 385
Other Office Expenses A/c Dr. Rs 480
To Petty Cash A/c Rs 1,840

When reimbursement is received on 1 October:

Petty Cash A/c Dr. Rs 1,840
To Cash A/c Rs 1,840

Use Bank instead of Cash where the transaction is funded directly through the bank and the question requires that treatment. These entries explain the postings; do not duplicate transactions already recorded through the relevant books.

If a question provides separate ledger accounts for items grouped under Other, post them to those accounts rather than treating every item as one expense. For this exercise, Other Office Expenses is the chosen combined account.

You may encounter another method that records expenses when the fund is replenished and keeps the Petty Cash ledger at its authorised amount. OpenStax’s petty cash lesson demonstrates that approach. Follow the method asked for; using both would record expenses twice.

What if the imprest increases or decreases?

Return to Meera’s cash balance of Rs 1,160 before replenishment.

The imprest increases to Rs 3,500

Required cash = 3,500 - 1,160 = Rs 2,340.

This contains two parts:

• Rs 1,840 to replace September’s payments.
• Rs 500 to increase the authorised fund.

The Rs 500 increase is not an office expense. It changes where the business keeps its cash.

The imprest decreases to Rs 2,500

Required cash = 2,500 - 1,160 = Rs 1,340.

The cashier receives less than September’s spending because the next period begins with a smaller target.

Check: 1,160 + 1,340 = 2,500.

Cash already exceeds the new target

Suppose the new target is Rs 900, while Meera still holds Rs 1,160.

900 - 1,160 = negative Rs 260.

That means Rs 260 should be returned to the head cashier. It is not a fresh reimbursement. After returning the excess, Meera retains the required Rs 900.

What if there is an extra receipt during the period?

Suppose an office starts with Rs 2,400, receives an additional authorised advance of Rs 500 midway through the month, and makes payments of Rs 1,950. The next period’s target remains Rs 2,400.

Closing cash = 2,400 + 500 - 1,950 = Rs 950.

Required top-up = 2,400 - 950 = Rs 1,450.

Blindly reimbursing Rs 1,950 would leave Rs 2,900, which exceeds the target by the earlier Rs 500 advance.

This is why you should read all receipts before using the shortcut. A mid-period advance changes the cash available, even if it does not change the authorised imprest.

What if the cash counted does not match the book?

In the main example, Meera’s expected cash is Rs 1,160. Suppose a physical count finds only Rs 1,130.

There is an unexplained difference of Rs 30. The recorded expenses are still Rs 1,840; do not quietly increase Postage or Other expenses to force agreement.

Check vouchers, change received and arithmetic. If the question explicitly requires recognition and replacement of a shortage, the treatment must identify that shortage separately. The cash needed to restore Rs 3,000 would be Rs 1,870, comprising Rs 1,840 of supported payments and the Rs 30 discrepancy.

OpenStax’s lesson linked above explains why vouchers and cash counts matter when reconciling a petty cash fund.

Seven mistakes to catch before submitting

1. Giving the full imprest again. Calculate the gap between the target and available cash.
2. Adding Total paid to the analysis totals. Those figures describe the same payments.
3. Putting reimbursement under Other expenses. It belongs in receipts.
4. Putting balance c/d in an expense column. It represents money not yet spent.
5. Using Conveyance for every transport-related item. Travel by people for office work usually belongs there; moving goods may require Cartage or Carriage under the question’s headings.
6. Treating every small payment as a new expense. Payment to settle an existing creditor is a reduction of that liability. Use a ledger-account column or the treatment specified, not an invented expense.
7. Showing negative physical cash. If payments exceed opening cash plus receipts, revisit the data. Cash in a box cannot be overdrawn.

If receipts, payments and debit-credit sides still feel unfamiliar, revise the cash book guide with single-column, bank-column and petty cash examples before attempting another full book.

Try these six practice questions

Cover the answers and calculate cash available before calculating reimbursement.

1. Find the usual reimbursement

Opening imprest is Rs 1,800. Payments are Rs 275, Rs 420, Rs 165 and Rs 310. There are no other receipts. Find closing cash and reimbursement to restore the same imprest.

Answer: Payments = Rs 1,170. Closing cash = 1,800 - 1,170 = Rs 630. Reimbursement = Rs 1,170.

2. Find the missing analysis total

Total payments are Rs 2,150. Postage is Rs 390, Stationery Rs 620 and Conveyance Rs 480. What belongs in the remaining Other column?

Answer: Other = 2,150 - 390 - 620 - 480 = Rs 660.

3. Increase the imprest

A petty cashier has Rs 720 left from an opening fund of Rs 2,500. The new authorised amount is Rs 2,900. There were no other receipts. How much cash is required?

Answer: 2,900 - 720 = Rs 2,180. This replaces Rs 1,780 spent and adds Rs 400 to the fund.

4. Account for an additional receipt

Opening cash is Rs 2,000. A further Rs 600 is received during the period. Payments total Rs 2,150. Restore the fund to Rs 2,000.

Answer: Closing cash = 2,000 + 600 - 2,150 = Rs 450. Top-up = 2,000 - 450 = Rs 1,550.

5. Split one voucher

One Rs 230 voucher covers Rs 140 of files and Rs 90 of courier charges. The book has Stationery and Postage columns, with courier included under Postage. Show the entry.

Answer: Total paid Rs 230, Stationery Rs 140, Postage Rs 90. The analysis adds to Rs 230.

6. Reduce the fund below cash held

Cash available is Rs 980. The new imprest is Rs 800. What happens?

Answer: Return Rs 180 to the head cashier. Cash retained = 980 - 180 = Rs 800.

Frequently asked questions

What does imprest mean in a petty cash book?

It is the authorised fund the petty cashier should hold after replenishment. Cash on hand usually falls below it as payments are made.

Is reimbursement always equal to expenses?

Only in the straightforward case with a full opening imprest, no extra receipts or discrepancies, and an unchanged target. Otherwise calculate the amount required from the target and cash available.

What is the difference between a simple and an analytical petty cash book?

An analytical book adds columns that classify payments by purpose. A simple book records receipts and payments without that detailed column breakdown.

Is cash received from the head cashier income?

No. It is an internal transfer of business cash to the petty cashier. It does not create revenue or profit.

Why is balance c/d written on the payment side?

It is the balancing figure that makes the two cash totals agree. It represents closing cash, not money paid away. The same amount reappears as balance b/d on the receipt side next period.

Should reimbursement go into the analysis columns?

No. Analysis columns explain payments. Reimbursement is recorded as a receipt.

Where should courier charges be recorded?

Use a Courier column if provided. If the question groups courier with Postage, use that column. Keep the classification consistent with the required headings.

Can petty cash have a credit balance?

Actual cash cannot be negative. An apparent credit balance suggests a missing receipt, duplicated payment or other error that needs checking.

Is increasing the imprest an expense?

No. Increasing the fund transfers additional cash to the petty cashier. Expenses arise from the underlying payments, not from setting aside more cash.

What is the quickest way to check my answer?

Make three checks: analysis totals equal total payments; opening cash plus receipts minus payments equals closing cash; and closing cash plus replenishment, or minus any return, equals the next authorised imprest.