A petty cash fund is a predetermined amount of money used to make relatively infrequent and low-cost purchases for an establishment.

• A. Petty finance
• B. Float
• C. Emergency fund
• D. Petty cash fund

Answer: (D)

A petty cash fund is a small, predefined amount kept on hand specifically to cover inexpensive, infrequent purchases without going through the main purchasing process. This setup speeds up routine small-sum transactions—like stamps, batteries, or minor office supplies—while still keeping a record of those expenses through receipts and petty cash vouchers. The fund is managed by a custodian and periodically replenished from the main cash balance when it runs low, with proper documentation.

This term is used precisely for that purpose. The idea of a float refers to the cash available in a till or the initial cash balance used for making change, not a dedicated routine fund for minor purchases. An emergency fund is reserved for unexpected, larger costs, not everyday low-cost items. “Petty finance” isn’t a standard term for this concept in hospitality accounting.