Glossary · Bookkeeping basics
Petty cash
Petty cash is a small amount of physical cash a business keeps on hand for minor expenses, such as postage, parking or coffee supplies. It is tracked as its own asset account. Each payment from it needs a slip or receipt, and the box is topped up from the bank when it runs low.
Glossary / Petty cash · Also called cash box, imprest fund
How it works
Most businesses run petty cash on the imprest system: the box has a fixed amount, say $200. As money is spent, receipts replace it, so cash plus receipts always equals $200. When the box is topped up, the receipts are recorded as expenses and a cheque or withdrawal brings the cash back to $200.
Petty cash is a common place for small losses to go unnoticed. Keep it locked, give one person responsibility, count it at each top-up, and record any shortage as a separate expense rather than hiding it in another account.
Worked example: Topping up a $200 box
A dental office keeps $200 in petty cash. Over the month it pays $42 for postage, $65 for office snacks and $38 for parking, all with receipts. At month-end the box holds $55 in cash and $145 in receipts.
The office withdraws $145 from the bank to refill the box and records the expenses: postage $42, office supplies $65, travel $38. The petty cash account stays at $200.
| Expense | Amount |
|---|---|
| Postage | $42 |
| Office snacks | $65 |
| Parking | $38 |
| Top-up from bank | $145 |
In AcboBooks
Petty Cash sets up a cash box as a bank-type account, replenished from the bank. Each slip is entered as a cheque-type entry numbered PC-1, PC-2 and so on, so it shows in the register, in reports and in the audit trail, and the box can be reconciled like a bank account.
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Updated October 25, 2026. General information, not tax, legal or accounting advice. Rules and rates change; check with the IRS, the CRA, your state or province, or your accountant.
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