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Hello sir
Hope everything goes well
Can you assist me with this question please?
A petty cash imprest system is in operation of 150 being maintained. There are vouchers in the box totaling 76$ and IOUs totaling 35$. There is 29$ in the box and 10$ travel advance has just been given to a member of staff
How much should be drawn from the bank to restore the imprest ?
A. 110$
B. 120$
C. 76$
D. 121$
I am confused about weather the IOUs and advance payment add to vouchers and the result subtract from imprest amount or it have another formulaYour sincerely
Abdul Rahman
I am reading chapter 10 (maintaining petty cash records) fa1 Kaplan book but I can’t find out how to deal with IOUs and advance payment
I don’t think there’s standard treatment f travel advances. I would treat it as expenditure on the assumption that the amount advanced is realistic.
$76 has been spent; I suggest $10 also has also been spent. The $35 should come back anyhow so I would suggest $86 needs to be replenished. This is not a listed answer and the only other viable on is $76. –
Sir but we are not sure about when we reimburse money from IOUs if we don’t claim it from bank maybe we faced to shortage of cash
There for I think the IOUs also add to voucher total and advance payment and the correct answer is 121
One method to top up a petty cash which run on the imprest system is (imprest amount-cash in petty cash box) page 218 chapter 10 Fa1 bpp book
What is your opinion sir
Thank youIf you do draw the IOU amount from the bank and then the IOUs are repaid you could end up with a dangerous amount of cash in the petty cash box. The purpose of the imprest system is to ensure that too much cash does not accumulate.
We have different editions of the Kaplan book, but in Para 4.6 in chapter 10 of mine it states that for the purposes of petty cash only, IOUs are to be treated as cash so that:Imprest amount = Notes and coins in box + IOUs plus vouchers.
I stick with my original suggestion.
Sir l am studying bpp book in chapter 10 para 8 describe how to topping up petty cash which run on imprest system
There is 2 methods
1: imprest amount less cash in petty cash box = cash needed
2: total payment less receipt = cash neededIt say total payment not total voucher the IOUs is also refer as a payment and what about advance payment we only reimburse the change
What is your opinion now?
Thank youConsider that we drawn 76$ from bank sir, and we already have 29$ dollars in petty cash box and let’s say we treated the IOUs as cash now we have 140$ cash in box
But our petty cash imprest system is in operation of 150$ being maintained
Now we will faced to shortage of cash in this periodI’m not really interested in this anymore. It concern PETTY cash and the important thing is to have a system that accounts for expenditure and prevents the amount of cash in the box from becoming too great.
Different companies will have different approaches. Choose a method you’re happy with. Any real OT question will have been well-scrutinised for ambiguities.
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