chapter 5: petty cash book

Question 1

why is the petty cash book used?

Answer 1

• to record small cash payments
• to help reduce the number of entries in the main cash book

Question 2

explain the dual function of the petty cash

Answer 2

it is a book of first entry where small cash payments transactions from the petty cash vouchers are recorded but also acts as a ledger account for petty cash.

Question 3

define a petty cash voucher

Answer 3

an internal source document from which entries are made in the petty cash book

Question 4

explain the imprest system

Answer 4

system according to which the petty cash float is restored each month by payment of cash exactly equal to the total spent