ExpertEasy2 marksMultiple Choice
ACCA · Question 10 · Petty Cash
A service firm operates a petty cash imprest system with an imprest amount of $300. At the end of the month, the petty cash box contains $45 in cash and vouchers for the following expenses: Office supplies $120, Taxi fares $85, and Coffee/Tea $50. What amount needs to be withdrawn from the bank to restore the imprest balance?
A service firm operates a petty cash imprest system with an imprest amount of $300. At the end of the month, the petty cash box contains $45 in cash and vouchers for the following expenses: Office supplies $120, Taxi fares $85, and Coffee/Tea $50. What amount needs to be withdrawn from the bank to restore the imprest balance?
Answer options:
A.
$300
B.
$255
C.
$45
D.
$205
How to approach this question
Under the imprest system, the reimbursement amount equals the total of the expenses paid out (the vouchers).
Full Answer
B.$255✓ Correct
In an imprest system, the petty cash float is restored to its original fixed amount at the end of the period. The amount required to restore the float is exactly equal to the total of the expense vouchers. Total vouchers = $120 + $85 + $50 = $255. Alternatively, Imprest ($300) - Cash remaining ($45) = $255.
Common mistakes
Reimbursing the remaining cash amount ($45) instead of the spent amount.
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