ExpertMedium2 marksMultiple Choice
ACCA · Question 08 · The use of double-entry and accounting systems
A company operates a petty cash imprest system with a float of $300. At the end of the month, the petty cash box contains $45 in cash and vouchers for office supplies ($120), taxi fares ($80), and postage ($50). The cashier realizes there is a cash shortage. How much cash must be withdrawn from the bank to restore the imprest amount?
A company operates a petty cash imprest system with a float of $300. At the end of the month, the petty cash box contains $45 in cash and vouchers for office supplies ($120), taxi fares ($80), and postage ($50). The cashier realizes there is a cash shortage. How much cash must be withdrawn from the bank to restore the imprest amount?
Answer options:
A.
$250
B.
$255
C.
$300
D.
$45
How to approach this question
In an imprest system, the reimbursement amount is always the difference between the imprest level and the actual cash remaining.
Full Answer
B.$255✓ Correct
Under the imprest system, the petty cash float is restored to its fixed amount ($300). If there is $45 left in the box, the amount required to restore the float is $300 - $45 = $255. The shortage of $5 ($300 - $45 - $250 vouchers) is written off as an expense, but the physical cash needed is still $255.
Common mistakes
Reimbursing only the voucher total ($250) and ignoring the cash shortage.
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