A petty cash book is a book that keeps a record of small expenses a firm incurs during a particular period. Petty means tiny or small.
There are always some small expenses firm has to incur and to keep a record of that expense, a petty cash book is maintained.
Expenses like – stationary expenses, tea or coffee expense, postage expenses, etc.
Advantages of the petty cash book:
It helps in controlling petty expenditure.
It helps in keeping track on petty expenses.
It helps in time-saving and reducing labor costs.
It reduces the burden of cash books.
It helps in reducing teh burden of the chief cashier.
Final answer:
Petty cash is maintained to keep and track the record of petty expenses. It helps in maintaining records properly and reduces errors in the books of accounts. It saves time and labor expenses because it is easy to maintain.