What are the advantages of imprest?
The advantages of using the Imprest system are versatility, accountability, practicality, limitation of theft, ease of use and limitation of expenditure. The system is a form of managing petty cash in a business.
What are the two main advantages of the petty cash system?
A petty cash fund can be used for office supplies, cards for customers, flowers, paying for a catered lunch for employees, or reimbursing employees for expenses. Petty cash’s main advantages are that it’s quick, convenient, and easy to understand and use.
What is the imprest system of the petty cash book?
An imprest system of petty cash means that the general ledger account Petty Cash will remain dormant at a constant amount. If the amount of petty cash is $100, then the Petty Cash account will always report a debit balance of $100.
What is the difference between petty cash and Imprest system?
Imprest is a cash account on which a business relies for paying off small or minor expenditures and the amount is replenished by the cashier who ensures that a fixed balance is maintained. Petty cash is the cash that is used for the purchase of office supplies, refreshments etc.
What are the disadvantages of petty cash book?
What are the disadvantages of the petty cash book?
- Petty cash is prone to accounting errors due to a lack of any kind of documentation for tracking the cash.
- There is a chance of theft of petty cash by employees and it will be difficult to track the source.
What are the disadvantages of the Imprest system of keeping petty cash book?
One of the major drawbacks of using an Imprest system is that it causes huge inconvenience for larger expenses. The system is highly compatible and convenient for smaller expenses while opposite for larger expenses.
What are the features of imprest system?
Features of the Imprest System All cash distributions from the petty cash fund are documented with receipts. Petty cash disbursement receipts are used as the basis for periodic replenishments of the petty cash fund. Variances between expected and actual fund balances are regularly reviewed and investigated.
What is the difference between petty cash and imprest system?
What are the advantage and disadvantage of petty cash book?
It is an easy method of recording petty expenses. The preservation of petty cash book does not need particular knowledge of accounting. Petty cash book maintains records of all petty payments analytically. Petty cash book supplies information regarding petty payments made on dissimilar heads more simply and rapidly.
What are disadvantages of cash book?
Disadvantages of Cash Book
- As a cash book only records only cash transactions as it does not include all types of transaction like credit transaction.
- As it does not include credit transactions, so it does not show the liabilities of the business.
What is the difference between petty cash and imprest?
Which of the following best explains the imprest system of petty cash control?
The correct answer is B. The exact amount of expenditure is reimbursed at intervals to maintain a fixed float.