How The Imprest System Of Petty Cash Books Works?

Question

How The Imprest System Of Petty Cash Books Works?

4 Answers

Answer Question

Answer 1

An imprest system of petty cash means that the general ledger
account Petty Cash will remain set at a given amount. As
long as set amount is adequate for the small disbursements, there will be no entry in general ledger account petty cash.

When the amount gets low, the petty
cash custodian will request a check to replenish the amount
that was disbursed. The requested check is drawn on the
organization's checking account, the Cash account is credited not the petty cash account. The expense accounts
will be debited as shown by the petty cash receipts, e.g. Postage expense, supplies
expense etc. In a nut shell, the Petty Cash account is not
involved in the replenishment. Replenishment means getting the total amount back as was set before.Source ' target='_blank' class='qa'>blog.accountingcoach.com

Answer 2

An impressed system of petty cash means that the general ledger
account Petty Cash will be set at a given amount. As
long as set amount is adequate for small disbursements the Petty Cash account will never have an entry
again.
When the amount in the account gets low, a request will be made to replenish the money
that was disbursed. The requested check is drawn on the
organization's checking account, the Cash account will be credited not the Petty Cash
account. The expense accounts
will be debited as shown by the petty cash receipts, e.g. Postage expense, supplies
expense. In a nut shell, the general ledger account Petty Cash is not shown to be involved in the replenishment.

Answer 3

An imprest system is where one can only reimburse the amount used e.g if at the beginning of a month there is Ksh.20,000 as pettycash float,and by the end of the month the amount spent is ksh.18,000, an amount of Ksh.18,000 will be replaced to bring the amount of petty cash float back to Ksh.20,000

Answer 4

An imprest system is a method of utilizing loans as prevention from illegal activity like fraud or theft. There are several imprest systems; the one most popularly used is called as the petty cash imprest system.

The aforementioned system works on the basic foundation that one only has to replenish or replace the amount that one has spent. For example, if one begins the month with 200 pounds in one's petty cash float and spends 150 pounds from that cash in the course of the month, an amount of 150 pounds will automatically be replaced in the petty cash float to bring about equilibrium in the petty cash float back to the amount of 200 pounds. This system is the most widely used imprest system.

In the petty cash system, on can only spend the amount that is reserved in the petty cash float which can be replaced. This system is very useful to keep a track of how much one spends.