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JAMB Principles of Accounts 1997 Question 11

Question 11

Petty Cash

Which of the following demonstrates the imprest system?

  1. A.Float → expenses paid → cash in bank → float.
  2. B.Float → cash from bank → expenses paid → float.
  3. C.Float → expenses paid → cash from bank → float.
  4. D.Float → cash in bank → expenses paid → float.
Show the answer and explanation

Answer: C (Float → expenses paid → cash from bank → float.)

Explanation

The petty cashier starts with a float, pays expenses, then receives cash from the bank equal to what was spent, restoring the float.