What is the term for a small amount of cash kept on hand for minor purchases?

The term "Petty Cash" refers to a small amount of cash that is kept on hand to cover minor purchases and expenses that occur frequently in a business. This fund is typically used for small transactions that are not practical to process through the standard payment methods, such as checks or electronic payments. Maintaining a petty cash fund allows for easier management of small expenses while streamlining financial record-keeping for these types of transactions.

In a business context, having petty cash helps to ensure that the daily operational needs can be met efficiently without delaying activities due to the formalities involved in processing larger disbursements. It fosters quicker transactions for things like office supplies, minor repairs, or refreshments for meetings.

The other terms do not accurately describe this specific practice. "Operating Cash" usually refers to the cash available for the day-to-day operations of a business, while "Emergency Fund" denotes savings set aside for unforeseen expenses or emergencies, typically not related to routine purchases. "Discretionary Funds" refer to money available for expenditures at the discretion of management or individuals, but again, this is broader and not specific to minor cash transactions.