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Difficulty: EasyPetty Cash Book and the Imprest System

A petty cashier is assigned a weekly imprest float of ₦20,000\text{₦}20,000. During the week, petty expenses incurred for office transport and stationery amounted to ₦14,500\text{₦}14,500. What is the amount needed to reimburse the petty cashier at the end of the week to restore the imprest float?

  1. A
    ₦5,500\text{₦}5,500
  2. ₦14,500\text{₦}14,500Answer
  3. C
    ₦20,000\text{₦}20,000
  4. D
    ₦34,500\text{₦}34,500

Answer

₦14,500\text{₦}14,500
Under the imprest system, the petty cashier is refunded the exact total amount of disbursements incurred during the period to bring the petty cash balance back to the agreed imprest float level.

Step-by-Step Solution

1
Identify the total petty cash expenses disbursed during the week
Total spent = ₦14,500\text{₦}14,500
The imprest system operates by reimbursing the petty cashier an amount equal to the total expenses paid out during the period.
2
Determine the required reimbursement amount
Reimbursement amount = ₦14,500\text{₦}14,500
Restoring the float to its original level of ₦20,000\text{₦}20,000 requires topping up the remaining balance (₦20,000−₦14,500=₦5,500\text{₦}20,000 - \text{₦}14,500 = \text{₦}5,500) with the spent amount of ₦14,500\text{₦}14,500.

Key Concept

Imprest System Reimbursement Rule
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Topics

Petty Cash Book and the Imprest System

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