ACCA Applied Knowledge · Financial Accounting · Double-entry bookkeeping principles including the maintenance of accounting records
Dunmore Co uses the imprest system for petty cash with a float of $300. During the period, vouchers were: stationery $64, travel $82 and refreshments $39. The petty cash book also shows that $15 of the stationery voucher was for items bought for the owner's personal use and is to be treated as drawings. The cashier received a reimbursement from the bank to restore the float. Which statement is correct?
The reimbursement is $185, the total of the vouchers, restoring the $300 float. Stationery expense is $49 and $15 is debited to drawings because it was personal. Expensing the full $64 would overstate costs and understate drawings.
- AReimbursement is $185 and drawings is debited $15, with stationery expense $49Correct
- BReimbursement is $170 and drawings is debited $15, with stationery expense $49
- CReimbursement is $185 and stationery expense is debited $64 with no drawings entry
- DReimbursement is $200 and drawings is debited $15, with stationery expense $64
Explanation
Total vouchers = 64 + 82 + 39 = $185, which is the reimbursement needed to restore the imprest. Of the stationery, $49 is expense and $15 is drawings. Option 2 has the wrong total, option 3 ignores drawings, and option 4 has the wrong total and double counts.
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