what is petty cash 
a petty cash fund is a small amount of company cash often kept on hand e g in a locked drawer or box to pay for minor or incidental expenses such as office supplies or employee reimbursements a petty cash fund will undergo periodic reconciliations with transactions also recorded on the financial statements in larger corporations each department might have its own petty cash fund understanding petty cashpetty cash provides convenience for small transactions for which issuing a check or a corporate credit card is unreasonable or unacceptable the small amount of cash that a company considers petty will vary with many companies keeping between 100 and 500 as a petty cash fund examples of transactions that a petty cash fund is used for include petty cash fund custodians are appointed to oversee the fund the custodial duties generally include enforcing petty cash rules and regulations requesting replenishments and dispensing funds requirements for petty cashthe use of a petty cash fund can circumvent certain internal controls however the availability of petty cash doesn t mean that it can be accessed for any purpose by any person many companies employ strict internal controls to manage the fund often a few individuals are authorized to approve disbursements and can only do so for expenses related to legitimate company activities or operations a petty cashier might be assigned to issue the check to fund the petty cash drawer and make the appropriate accounting entries the petty cash custodian is charged with distributing the cash and collecting receipts for all purchases or any uses of the funds as the petty cash total declines the receipts should increase and add up to the total amount withdrawn by having a petty cash cashier and a petty cash custodian the dual process helps to keep the funds secure and ensure that only those authorized have access to it recording petty cash