Imprest, petty cash and other revolving funds office of the. Jul, 2019 the imprest system is an accounting system for paying out and subsequently replenishing petty cash. During the period he makes payment out of this money. Understand how the imprest system works in the petty cash book. Petty cash book is maintained by the petty cashier and act as the petty cash book petty cash book 3. Petty cash book is the book which is used for the purpose of recording expenses involving small amounts. Imprest, petty cash and other revolving funds office of. The system is very useful specially if an analytical petty cash book is used. It relieves the cash book and the chief cashier of the burden of recording tiny and frequent payments. An imprest system is used to run and manage a petty cash fund.
Under this system, the petty cashier is given a lumpsum amount for meeting petty expenses. Under the imprest petty cash system, the petty cashier amount is fixed for a given time period under which is usually under a month or a week. Petty cash kas kecil diartikan sebagai sejumlah uang yang disediakan oleh sebuah perusahaan yang memiliki fungsi untuk membayarkan pengeluaranpengeluaran yang nominalnya tidak terlalu besar dan akan tidak ekonomis jika dibayarkan dengan memakai cek. The petty cash will start at any fixed balance at the beginning of the month, and it will reduce over time due to expense. The imprest system is a form of financial accounting system. Petty cash is a small reserve of used for transactions and expenditures where it doesnt make sense to write cheques. This is recorded as a separate account in the companys. Petty cash book is a kind of cash book which records large number of small payments such as conveyance, cartage, postage, telegrams and other expenses under the imprest system. First, management has to estimate how many small purchases it will make and much money it will need for these purchases. Kumpulan contoh soal kas kecil metode imprest dan fluktuasi. Now lets learn to actually establish a good system where you will be able to use your log book.
Beside petty expenses, receipts from main cash are recorded. Imprest system petty cash book is quite helpful when the firm uses analytical petty cash book, wherein the book has one column to track the receipt of the amount, from the chief cashier and several other columns to write down expenses under the specific head. In a business operating this type of cash book, small cash payments are usually made out of petty cash. This makes the entire petty cash system susceptible to abuse or fraud. Petty cash is a small reserve of cash kept onsite at a business location for incidental cash needs. Petty cash book a petty cash book is shown on the next page. Recording of transactions ii petty cash book solutions. Required a state one advantage of the imprest system of petty cash. Imprest system on petty cash it is the form of a financial accounting system which commonly use with petty cash control. Petty cash floats and bank imprest accounts policy and procedures page 7 of 28. You can find the questionsanswerssolutions for the chapter 4 of cbse class 11 accountancy in this page.
The additional analysis columns are used to analyze expenditures as they arise. What are the advantages of the petty cash book answers. The main advantages of imprest system of petty cash are as follows. A s the petty cashier has to produce to the chief cashier the petty cash book for inspection, it acts as a healthy check on the petty cashier. Overall, petty cash is a largely outdated and inefficient system. An imprest system of petty cash means that the general ledger account petty cash will remain dormant at a constant amount. Note the analysis columns that enable the transaction to be recorded and analysed at the same time. Controllimitkeep track of petty cash expenditure the cash remaining and the vouchers received should equal the imprest can help to reduce fraud or other suitable advantage.
How the imprest system of petty cash book works your business. When petty cash is easy to get to employees, it is a suitable way to pay for little purchases. Petty cash book explanation, format, example, ordinary. In other words, we can say that if we add a bank column to both sides of a single column cash book, it would become a double column cash book. The advantages of analytical petty cash book are given below. The imprest system is an accounting system for paying out and subsequently replenishing petty cash.
Most cash should be deposited right away in the bank, but a small amount can be kept on hand in a petty cash account earmarked for minor. Contohnya saja seperti untuk mendanai konsumsi, membayar klien atau sesama rekan kerja di kantor. Nov 27, 2019 the imprest petty cash system is a method of accounting for petty cash expenses. Petty cash book 2019, imprest system of petty cash. The imprest holder should document the process of handing over the imprest fund cash and documents to the new holder, and a copy of the handing over report should be sent to the controller. Under this time period, the cashier has to run the petty cash account under the given budget. A petty cash float or imprest account must only be set up where there is a justified need for one. It may be maintained by ordinary or by the imprest system. This type of book is maintained just like a cash book. The balance of the petty cash book will be shown on the asset side of balance sheet as cash in hand at the end of the year. Di mana saldo petty cash pada sistem imprest adalah tetap.
Petty cash floats and bank imprest accounts policy and. The petty cash book is ruled in the form of the single column cash book with an amount column and addition oat columns for the more usual classes of expenditure. Please practice handwashing and social distancing, and check out our resources for adapting to these times. At the end of the period a petty cash reconciliation is carried out. The various columns are totalled to show the reason for making payments, and then the. Nov 23, 2015 understand how the imprest system works in the petty cash book. The base characteristic of an imprest system is that a fixed amount is reserved, which after a certain period of time or when circumstances require, because money was spent, it will be replenished. The most common imprest system is the petty cash system. Before an imprest petty cash float is set up it must be authorised by a head of service and countersigned by a principal accountant or group accountant.
The imprest petty cash system is a method of accounting for petty cash expenses. The analytical petty cash book and the imprest system. Petty cash book is maintained by petty cashier and acts as the petty cash account. Under the system, the petty cash fund balance is always maintained at a fixed amount decided on when the fund is first established during an accounting period petty cash is used to pay cash expenses which are supported by petty cash vouchers. Nov 02, 2019 usually, the petty cash book are maintained on the basis of imprest system. The imprest system is one where the cashier gives the petty cashier enough cash to meet the petty cash needs for the following.
The attached article explains best practice for this. The amount so ascertained is given to the petty cashier in the beginning. The cash is given to the petty cashier either on ordinary system or imprest system which are briefly explained below. Petty cash book explanation, format, example, ordinary and. Under this imprest system of petty cash book, the head cashier provides a fixed amount of money to the. The base characteristic of an imprest system is that a fixed amount is reserved, which after a certain period of time or when circumstances require, because money was spent, it. The system is a form of managing petty cash in a business. Totals are carried forward from page to page until the end of the periods. Petty cash is a comprehensible and common method of paying for business operating cost. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, stay safe and healthy. The cash allocated for petty expenditures for a specific period is entered on the credit side of general cash book and on the debit side of petty cash book.
What are the advantages of using the imprest system. When the account goes below a certain specified amount, the system is replenished. Sep 30, 2019 overall, petty cash is a largely outdated and inefficient system. Commission of fraud is reduced as the chief cashier verifies petty cash book alongwith vouchers and the petty cashier is more responsible. Petty cash book with imprest system simple and tabular forms. Usually, the petty cash book are maintained on the basis of imprest system. During an accounting period petty cash is used to pay cash expenses which are supported by petty cash vouchers. You need to develop a set of policies or procedures dictating the handling of cash in your business to avoid problems such as theft and misappropriation. Petty cash book may be maintained by the ordinary system or by imprest. Jul 16, 2019 petty cash works on the imprest system, in which there is an initial amount of money put into an account, which is drawn upon for a specific purpose in this case, petty cash. Sedangkan pada sistem fluktuatif saldo rekening petty cash tidak tetap alias berubahubah. Imprest system of petty cash is a system where the petty cashier is given a lump sum in cash often called a float keeping in view the possible needs of the business to meet its petty expenses for a stated period, e.
The book has one column to record receipt of cash which is only from the main cashier and other columns to record payments of various types. The double column cash book also known as two column cash book has two money columns on both debit and credit sides one to record cash transactions and one to record bank transactions. Petty cashier is given the appropriate amount of cash and after spending the whole of that amount, he submits the account to the head cashier. The chief cashier is relieved from the cumbersome work of petty cash disbursement. Fixed amount is paid to the petty cashier along with the imprest system. These small cash payments are recorded in a separate book, known as a petty cash book. Required c i state the amount of cash there should have been in the petty cash box.
From the following particulars prepare a petty cash book under imprest system. Advantages and disadvantages of analytical petty cash book. Petty cash book format example definition explanation. Pengurangan kas kecil pada imprest fund system di jurnal seperti berikut ini. Cambridge igcse accounting0452o level principles of accounts7110 notes.
Second, a check is written for this amount, and the cash is given to the cashier in charge of the petty cash fund. Apr 29, 2020 such a system is known as the imprest system of petty cash. Other results for petty cash book questions and answers pdf. The imprest system is designed to provide a rudimentary manual method for tracking petty cash balances and how cash is being used. The controllers office shall take the necessary steps to effect the name change on the university financial system. Guidance in this section applies to petty cash, imprest accounts, working funds, advance travel, stamp funds, change funds, or any other revolving funds set aside for facilitating minor.
Like columnar petty cash book, it also contains many money columns in the credit side and one money column in the debit side and a particular column and a date column are also similar to that of the columnar or analytical petty cash book. Petty cash book 2019, imprest system of petty cash advantages. The petty cashier is given a sum of money in the beginning of the period. Under this system, an estimate is made of the amount required for petty expenses for a period say a week, a fortnight, or a month. Whether you decide to make a petty cash form or an actual book, the steps would be the same and the outcome would result in how well you manage the whole system. At the end of the period, the cashier submits the report and the amount spent by him is reimbursed so that. Any cash, which the petty cashier receives, will be recorded on the debit side left cash column of the book and any cash which he pays out will be recorded on the credit side right cash column of the boo k. Such a system is known as the imprest system of petty cash. Each time money is withdrawn, a voucher must be placed in the cash box to account for any missing funds. At end the firm reimburses him the amount paid by him so that the balance of cash with him. The advantages of petty cash system enumerated are as follows. This can be handled by a junior member of the staff, making it simpler for management. An imprest account is an advance of cash or a natwest bank account, with a balance and cheque book facility, which is made available to various establishments to enable them to make certain types of payment 1. The petty cash voucher details are then entered in the petty cash book and the voucher filed away in numerical order so that it may be easily located if necessary.
The imprest system is used for petty cash book maintenance. Guidance in this section applies to petty cash, imprest accounts, working funds, advance travel, stamp funds, change funds, or any other revolving funds set aside for facilitating minor disbursements, making change, and similar uses. Recording of transactions ii petty cash book solutions this page contains the cbse accountancy class 11 chapter recording of transactions ii notes. How the imprest system of petty cash book works your.
It is the book which is used for the purpose of recording expenses involving small amounts. While convenient for small purchases, it is not a realistic solution for larger expenses. In module 12, which covered the bank cash book, the advantages of paying all cash and cheques into the bank intact were evident. Petty cash book with imprest system simple and tabular.
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