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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, which statement correctly describes how the petty cashier is reimbursed at the end of a period?

The petty cashier is reimbursed exactly the amount spent during the period, which restores the float to the fixed imprest amount. This keeps the opening balance the same each period and makes control easy, because cash in hand plus vouchers always equals the imprest.

  1. AThe cashier is given a fixed lump sum that is never topped up until it is exhausted
  2. BThe cashier receives exactly the amount spent during the period, restoring the float to its original imprest amountCorrect
  3. CThe cashier receives the average of the last three periods' expenses
  4. DThe cashier is reimbursed only for expenses above the imprest amount

Explanation

Under the imprest system a fixed float is set. At period end the head cashier reimburses the amount actually spent, so the float returns to its original level. The lump-sum-until-exhausted option describes a non-imprest approach.

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