Internal control over it is very important since cash is a highly needed asset and is readily transferable. It is very important to always have cash in hand but it is part of internal control to keep as little cash on hand as possible.

The cash kept on hand of a business that is allocated to pay for small items such as postage due, a birthday card, or fuel expenses is known as Petty Cash.

For further information on petty cash including how to record this account into your journal, watch the video below: