Imprest System of Petty Cash

>> July 13, 2010


This is the perfect system for paying cash petty expenditures. In this system, accountant sets the month or week and he pays fixed amount to his assistant clerk for paying day to day small expenditures. Now, assistant clerk pays all small expenditures and records in petty cash book. Now, after closing the fixed period, accountant  replenishes the money which has been actually paid by assistant clerk for day to day small expenses. After this, assistant clerk will become imprest cash for next month small expenditures. So, this system is called imprest system of petty cash.
 For example, accountant pays $ 100 to his assistant clerk for small expenditures for a month. But assistant clerk paid only 80 $ for small expenses. After investigation, accountant will give only $ 85 to assistant clerk. Now, assistant clerk will have $ 100. Suppose, next month, he pays $ 95, then he will replenish $ 95 not $ 100.

Importance of Imprest System of Petty Cash

  • This system is helpful to reduce accounting fraud because cashier or assistant clerk will replenish only what he paid actually for small expenses.
  • Accountant or head cashier can analysis the petty expenses after comparing old petty expenditures for knowing trend of these petty expenses.





You might like:


Follow Us


1 comments:

Anonymous,  December 24, 2012 at 1:04 PM  

which you had a sample of how to balance off a petty cash book and transfer the expenditures to the general ledger.

Post a Comment

About Accounting Education


An educational site with 2500+ articles, solutions, video-guides and tutorials on all topics related to accounting and finance.

Get Update on Mobile


Type svtuition.org in your mobile phone web browser for free access anytime, from any place.The content is designed specifically for cell phones and mobile devices.

Contact Us


Contact us Send an Email Phone number and vCard LinkedIn profile Follow us on twitter