Basic accounts

Question 1

what are the purposes of petty cash book?

Answer 1

1) Tol list the transactions to transfer into the lesger accounts

2)acts as a aledger for petty cash transactions

Question 2

Why do dishonored cheques occur?

Question 3

what benift does a petty cash book bring?

Answer 3

It is easier to record small payment as not every small payment woul be recorded in the cash book or ledger making no of entries in books less

Question 4

explain the purpose of a petty cash voucher

Answer 4

shows the purpose for which money is required + date + signiture of person recieiving the money

Question 5

How does the imprest system work?

Answer 5

Petty casheir starts each year with a fixed ammount known as IMPREST or FLOAT
through out year payements are made out of this cash and recroded in cashbook
at the end of year when cash book is balanced–> cheif cashier provides the Petty chashier with enough cash to restore balance to ammount of float
so petty cashier starts each period wth same ammount of imprest

Question 6

what benifit does the imprest syustem bring?

Answer 6

1) Reduces fruad
2) Petty cash book expenditure can be controled
3)ammount of imprest can be adjustred–> if too much ot not enough

4) Cheif cashier is aware as to exactly how much petty cash is being spent in each period

Question 7

A petty cash book is a book of prime entry as well as a ledger account
TRUE OR FALSE

Answer 7

TRUE