Question

Answer in one sentence only :

Write the meaning of imprest system of petty cash book.

Answer 1

Under the imprest system of Petty Cash Book, the chief cashier makes the reimbursement of the amount spent by the petty cashier; this makes the closing balance of the Petty Cash Book the same as the opening balance. The amount that the main cashier hands over to the petty cashier is known as imprest or float. Suppose, on 1st April 2014, the amount given to the petty cashier is Rs 200 and Rs160 were spent during the month. So, the chief cashier makes the reimbursement of Rs 160 to the petty cashier and after including the remaining balance, i.e. Rs 40, the closing balance will be same as the opening balance.