[Kelly Jorgeson]

What is a petty cash transaction

[morgaine300]

Petty cash is a small amount of actual cash that is kept on the premises, usually in a little lock box in the office. (The "cash" account is actually a bank account, usually checking. Petty cash is literally cash kept at the business location.)

It's a fund kept around used to pay for small items that you might not want to write a check for. Like someone might take it to run to the post office and get some stamps, or fill the company car with gas, or buy some office supplies.

So any transaction that involves the petty cash is a petty cash transaction. It can be anything because there aren't any rules about what has to be paid out of petty cash versus writing a check.