the most common way of accounting for petty cash expenditures is to use the imprest system. the initial fund would be created by issuing a cheque for the desired amount. an amount of $100 would typically be sufficient for most small business needs as the expenses to be covered are for small amounts. the bookkeeping entry for this initial fund would be to debit petty cash and credit bank account. this cheque would then be cashed to acquire the actual cash needed for payments.