easy peasy
What is a petty cash book?
A record of small cash payments.
How does the imprest system control petty expenses?
Limits misuse by fixing an authorized float.
Why is it important to maintain supporting documents for petty cash?
To prevent fraud and verify expenses.
If vouchers are more than the imprest, what does this mean?
It means the petty cashier overspent or made an error.
Which document proves a petty cash payment?
a) Invoice
b) Voucher
c) Ledger
d) Receipt book
b) Voucher
Why is a petty cash book maintained in a business?
To track minor expenses separately.
List three examples of expenses usually recorded in a petty cash book.
Postage, stationery, motor exp.
Who verifies the petty cash book?
The accountant or internal auditor.
Why is it necessary to analyze petty cash under different expense heads?
To track how much is spent on each type of expense and control costs.
The imprest system helps in:
a) Increasing expenses
b) Controlling small payments
c) Recording large transactions
d) Paying salaries
b) Controlling small payments
What is the difference between a petty cash book and a cash book?
Cash book records all cash, petty cash only small expenses.
Why are small expenses not recorded directly in the main cash book?
To avoid cluttering the main cash book.
The petty cash book is usually maintained under the ______ system.
imprest
Who authorizes petty cash reimbursements?
a) Petty cashier
b) Main cashier/Manager
c) Customers
d) Suppliers
b) Main cashier/Manager
If imprest is $500 and expenses are $420, reimbursement will be:
a) $80
b) $420
c) $500
d) $920
b) $420
Who is responsible for maintaining the petty cash book?
Petty cashier.
How is petty cash replenished
By reimbursing the amount spent to restore the imprest.
Petty cash is kept to record _______ expenses.
small/minor
Which of the following is NOT usually paid from petty cash?
a) Postage
b) Travelling
c) Stationery
d) Machinery purchase
d) Machinery purchase
Petty cash is replenished:
a) At the end of a fixed period
b) At year-end only
c) Whenever cashier wants
d) Never
a) At the end of a fixed period
What is the imprest system of petty cash?
A system where a fixed amount is given and replenished.
How often is petty cash reimbursed?
Usually at the end of a set period, like weekly or monthly.
A petty cash _______ is used as evidence for payment.
voucher
The imprest system means:
a) Giving unlimited petty cash
b) Restoring petty cash to a fixed amount regularly
c) Paying only salaries
d) Keeping no vouchers
b) Restoring petty cash to a fixed amount regularly
Petty cash is treated as:
a) Liability
b) Asset
c) Income
d) Expense
b) Asset