Petty Cash
Definition
A small cash float kept on site for minor expenses too trivial for a purchase order or card payment. Controlled with receipts for every disbursement and periodic replenishment back to the agreed float.
Related Terms in Core Accounting
Imprest System
A petty-cash control method that fixes the float at a set amount and tops it back up by exactly the receipts presented. Because cash on hand plus vouchers must always equal the float, any shortfall is visible immediately.
Reconciliation
Comparing two independent records of the same transactions and resolving every difference, most commonly the accounting ledger against a bank statement. Reconciliation is what makes a balance trustworthy rather than merely recorded.
Intercompany Transactions
Transfers of goods, services, loans or cost allocations between entities under common ownership. Each entity records its own side, and the matching amounts must be eliminated on consolidation so group results are not inflated.
Consolidation
Combining the financial statements of a parent and its subsidiaries into one set of accounts presenting the group as a single economic entity. Intercompany balances, sales and unrealised profits are eliminated in the process.
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