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Difficulty: MediumPetty Cash Book and the Imprest System

A firm operates an imprest system with a fixed petty cash float of ₦50,000\text{₦}50,000. At the end of August 2026, disbursements recorded in the petty cash book were: Travelling expenses ₦14,500\text{₦}14,500, Office stationery ₦9,200\text{₦}9,200, Postage stamps ₦4,800\text{₦}4,800, and Refreshments ₦6,500\text{₦}6,500. How much cash must be reimbursed to the petty cashier to restore the imprest float at the beginning of September 2026?

  1. A
    ₦15,000\text{₦}15,000
  2. ₦35,000\text{₦}35,000Answer
  3. C
    ₦50,000\text{₦}50,000
  4. D
    ₦85,000\text{₦}85,000

Answer

The cash amount to be reimbursed to restore the imprest float is ₦35,000\text{₦}35,000.
Under the imprest system of petty cash, the petty cashier is reimbursed the exact sum of all valid vouchers paid during the period. Adding the disbursements gives ₦14,500+₦9,200+₦4,800+₦6,500=₦35,000\text{₦}14,500 + \text{₦}9,200 + \text{₦}4,800 + \text{₦}6,500 = \text{₦}35,000. Drawing ₦35,000\text{₦}35,000 from the main bank account restores the petty cash balance from the remaining ₦15,000\text{₦}15,000 back to the fixed float of ₦50,000\text{₦}50,000.

Step-by-Step Solution

1
Calculate total petty cash disbursements for August 2026.
₦14,500+₦9,200+₦4,800+₦6,500=₦35,000\text{₦}14,500 + \text{₦}9,200 + \text{₦}4,800 + \text{₦}6,500 = \text{₦}35,000
Under the imprest system, the amount reimbursed to the petty cashier at the end of a period is equal to the total amount spent.
2
Verify the remaining cash balance in hand.
₦50,000−₦35,000=₦15,000\text{₦}50,000 - \text{₦}35,000 = \text{₦}15,000
The unspent cash remaining plus the reimbursement brings the float back to the fixed initial level of ₦50,000\text{₦}50,000.

Key Concept

Imprest System Reimbursement Rule
Estimated Time:1m 30s
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Topics

Petty Cash Book and the Imprest System

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