ExpertMedium2 marksMultiple Choice
ACCA · Question 10 · The Use of Double-Entry and Accounting Systems
A service firm uses the imprest system for petty cash with a float of $250. At the end of the month, the petty cash box contains $45 in cash and vouchers for office supplies ($120) and taxi fares ($80). A $5 voucher for postage is found to be missing, though the cash is gone. How much cash must be transferred from the main bank account to restore the imprest amount?
A service firm uses the imprest system for petty cash with a float of $250. At the end of the month, the petty cash box contains $45 in cash and vouchers for office supplies ($120) and taxi fares ($80). A $5 voucher for postage is found to be missing, though the cash is gone. How much cash must be transferred from the main bank account to restore the imprest amount?
Answer options:
A.
$200
B.
$205
C.
$250
D.
$45
How to approach this question
The reimbursement amount under the imprest system is always the Imprest Amount minus the Cash Remaining.
Full Answer
B.$205✓ Correct
Under the imprest system, the reimbursement amount is exactly what is required to bring the cash balance back to the imprest level. Imprest amount ($250) - Cash remaining ($45) = Reimbursement needed ($205). The missing voucher represents a cash shortage that must be recorded as an expense, but the physical cash needed to top up the box is still $205.
Common mistakes
Adding up only the available vouchers (120 + 80 = 200) and ignoring the cash shortage.
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