A petty cash fund is typically used with which type of purchasing system?

• A. Open market purchasing
• B. Just in time purchasing
• C. Vendor sourcing
• D. Closed-bid purchasing

Answer: (B)

Petty cash is designed for small, everyday, time-sensitive purchases that you don’t want to route through the full purchasing cycle. In a just-in-time purchasing system, the goal is to have items arrive exactly when they’re needed and to keep inventory to a minimum, so operations aren’t slowed by delays. A petty cash fund supports that by providing immediate funds to cover small, urgent needs—office supplies, a quick repair, or other minor items—so work can continue without waiting for a formal purchase order and longer lead times. The other methods describe larger-scale or competitive procurement processes, which aren’t the aim of petty cash.