Question 11
Petty CashI. The amount of the imprest is the same from one organization to another.
II. At the end of a fixed period, the petty cashier received a fixed sum of money.
III. At the end of a period, the petty cashier is reimbursed with the amount spent in that period.
IV. The system is a method by which a measure of control is kept on petty cash expenses.
Which of the above is correct about the imprest system?
- A.I, II and III.
- B.I, III and IV.
- C.II and IV.
- D.III and IV.
Show the answer and explanation
Answer: D (III and IV.)
Explanation
The float is fixed, but at the end of each period the cashier gets back exactly what he spent (III), which keeps control over petty spending (IV). The refund is not a fixed sum and the float differs between firms.