Tag: understand the concept of imprest system

Questions Related to understand the concept of imprest system

Payments in cash of small amounts like travelling expenses, postage, carriage etc. are recorded in the ________________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Main Cash book

  2. Petty cash book.

  3. Cash budget

  4. Journal proper

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Correct Option: B

Which of the following is/are advantages of the imprest system?

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. It saves the time of chief cashier

  2. It reduces the chances of misuse of cash by the petty cashier.

  3. It enables a great saving to be effected in the posting of small items to the ledger accounts.

  4. All of the above

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Correct Option: D

Which of the following by is incorrect?

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Every payment made by the petty cashier should be supported by evidence.

  2. Regularly petty cashier is reimbursed to make up his cash balance to the imprest.

  3. The petty cash book could be either a subsidiary book or a main book of accounts.

  4. In emergency the petty cashier may give staff loans of small amounts.

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Correct Option: D

State with reasons whether the following statement is true or false:
The balance in the petty cash book represents the amount spent.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. True

  2. False

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Correct Option: B

State with reasons whether the following statement is true or false:
Petty cash is an expense.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. True

  2. False

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Correct Option: B

Petty cash book can be treated as _____________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. register

  2. memoranda book

  3. part of double entry system

  4. none of the above

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Correct Option: C

What is an analytical petty cash book?

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Petty cash book formed in columnar form

  2. Petty cash book formed in tabular form

  3. Petty cash book formed In arithmetic form

  4. None of the above

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Correct Option: A

Which of the following statements is incorrect?

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. In emergency the Petty Cashier may give staff loans of small amounts

  2. The Petty Cash Book could be either a subsidiary book or a main book of accounts.

  3. Every payment made by the Petty Cashier should be supported by evidence

  4. Regularly Petty Cashier is reimbursed to make up his cash balance to the imprest

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Correct Option: A

If the debit and credit aspects of a transaction are recorded in the cash book it is a:

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Contra entry

  2. Simple entry

  3. Double entry

  4. Single entry

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Correct Option: A
Explanation:

Option A is correct .

Contra Entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, contra entry will be recorded on the credit side and vice-versa.

In petty cash book, the system followed ______________.

elements of book keeping and accountancy recording and posting of cash transactions understand the concept of imprest system petty cash book bank book and petty cash book

  1. Accrual system

  2. Impress system

  3. Cash system

  4. None of these

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Correct Option: B