PRC-1 · Chapter 2 · Question 62 of 100
Which of the following statements best describes the 'imprest system' of operating petty cash?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The petty cash float is restored to its original fixed amount periodically by reimbursing the exact amount of documented expenses.
Explanation
Under the imprest system, a fixed float (e.g., Rs. 10,000) is maintained. At the end of the period, the main cashier reimburses the petty cashier for the exact total of the expense vouchers to bring the physical cash back to Rs. 10,000.
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