What is Petty cash?
Petty cash (Definition)
Petty cash is a small sum of money kept on hand by business to meet unexpected small-ticket expenses that may emerge during normal business operations. It could be anywhere from $30 to a few hundred dollars, stored in a money tin in the office, and could be used for anything that doesn’t require a credit account or cheque drawn – such as emergency stationery or even a cup of coffee. Despite being a small amount of money, petty cash still needs to be recorded for tax purposes. Petty cash allows businesses to make minor purchases without providing a receipt through an expense reporting system, which can reduce the time spent bookkeeping for small items. It also gives businesses a readily available source of funds.