WAEC Financial Accounting 2001 Question 8

Question 8

Petty Cash

Taiwo is a sole trader who keeps his petty cash on the imprest system, the imprest amount being N4,000. The following transactions took place for a particular month:
Dec. 1 Petty cash in hand N517
1 Petty cash to imprest amount N3,483
6 Bought notebooks N328
7 Paid wages N914
14 Bought postage stamps N375
16 Paid to J. Thomas, a creditor N536
21 Paid wages N928
23 Bought envelopes N437
27 Bought postage stamps N210
Amount to be reimbursed at the end of the month is

  1. A.N4,000
  2. B.N3,728
  3. C.N3,483
  4. D.N1,842
Show the answer and explanation

Answer: B (N3,728)

Explanation

Total spent = 328 + 914 + 375 + 536 + 928 + 437 + 210 = N3,728, which restores the float to N4,000.