Petty Cash Law and Legal Definition
Petty cash is a small amount of cash that firms/organizations keep for incidental expenditures. Petty cash is used to make payments in situations where it is not sensible to make a check payment. Petty cash may be used for paying parking fees, taxi fares, postage stamps, and donuts expenses for client meetings.
Keeping petty cash is a good idea because it can avoid inconveniences related to writing, costs, and cashing a check. However, petty cash may be easily stolen by outsiders as well as employees within the organization. Therefore, petty cash should always be kept in a safe and secure place. Payments made using the petty cash should be carefully documented.