JAMB Principles of Accounts 2005 Question 9

Question 9

Petty Cash

Use the information below to answer questions 9 and 10.
Five hundred naira monthly is allowed on an imprest system. The following transactions took place:
Period 1: Cash advanced to petty cashier ₦500; Petty cashier paid out: Stamp ₦200, Newspapers ₦250
Period 2: Cash to petty cashier ₦450; Cashier paid for writing materials ₦350
How much should the petty cashier receive after period 2?

A.₦150
B.₦250
C.₦350
D.₦500

Show the answer and explanation

Answer: C (₦350)

Explanation

Balance after period 2 = 50 + 450 − 350 = ₦150. To restore the ₦500 imprest the cashier receives 500 − 150 = ₦350, the amount spent.