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CMA Foundation · Fundamentals of Financial and Cost Accounting · Cash Book, Bank Book, Petty Cash Book, Bank Reconciliation Statement

Under the imprest system of petty cash, the petty cashier at the start of a month is given Rs 5,000 as the imprest. During the month he spends Rs 3,640. How much will the head cashier pay to the petty cashier to restore the imprest?

The head cashier reimburses Rs 3,640. Under the imprest system, the petty cashier is refunded exactly the amount spent during the period, which restores the fixed imprest of Rs 5,000. Rs 1,360 is the balance still in hand, not the amount to be reimbursed.

  1. ARs 1,360
  2. BRs 3,640Correct
  3. CRs 5,000
  4. DRs 8,640

Explanation

Under the imprest system, the amount reimbursed equals the total expenses incurred during the period. Expenses are Rs 3,640, so Rs 3,640 is paid to bring the balance back to Rs 5,000. Rs 1,360 is the cash still in hand, not the reimbursement.

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