Final answer:
Instead of petty cash, many companies utilize banking services, storing money in accounts and using methods like direct withdrawals or debit cards for business purchases. Banks accommodate businesses of various sizes, offering customized borrowing for smaller firms and bond issuance for larger entities.
Step-by-step explanation:
Instead of a petty cash system, many companies use banks and the range of services banks provide, which allow employees to purchase business-related items. Banks are instrumental for a complex economy, streamlining transactions in goods, labor, and financial markets. Rather than dealing with large amounts of cash, businesses can store money in checking accounts or savings accounts, then utilize various methods such as direct withdrawal, writing a check, or using a debit card to make payments for business expenses.
For small businesses, bank borrowing offers a customized solution over issuing bonds, due to the more intimate understanding banks can have with firms through monitoring of deposits and withdrawals. Conversely, larger and well-established firms may prefer issuing bonds to raise new financial capital for investments, repay old bonds, or acquire other companies, which reflects the versatility of banking and financial institutions in catering to different business needs.