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A petty cashier of Nair Enterprises is given an imprest of Rs 5,000 on 1 April. During the month, total petty expenses were Rs 3,650. What amount will the head cashier pay to the petty cashier to restore the imprest, and how is it recorded?

The head cashier pays Rs 3,650, equal to the amount spent, restoring the imprest to Rs 5,000. This is a payment, so it is credited in the main cash book. The Rs 1,350 figure is the unspent balance still with the petty cashier.

  1. ARs 1,350, credited in the main cash book
  2. BRs 3,650, credited in the main cash bookCorrect
  3. CRs 3,650, debited in the main cash book
  4. DRs 5,000, credited in the main cash book

Explanation

Under the imprest system, the petty cashier is reimbursed exactly the amount spent, which is Rs 3,650, to bring the float back to Rs 5,000. This is a payment, so it is entered on the credit (payment) side of the main cash book. Rs 1,350 is the balance still in hand, not the reimbursement.

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