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Advantages imprest system





The imprest system (Advantages) - Accounting Example

01/02/2015
02:55 | Author: Kate Thompson

Imprest system of petty cash book
The imprest system (Advantages) - Accounting Example

Biggest advantage of imprest system is the method used to maintaining petty cash. In imprest system an amount estimated as necessary for the possible needs.

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ADVANTAGES OF THE IMPREST SYSTEM.

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This is called the imprest system of petty Cash. The best method of maintaining petty cash is known as the imprest system. The cashier after satisfying himself as to the correctness of the record, issue a cheque for the exact amount expended. The amount of this cheque together with the unspent balance will restore in the hands of the petty cashier the original sum with which he started. Under this method, an amount estimated as necessary for the possible needs of the business to meet petty expenses for the week or the month is drawn by a cheque and handed over to the petty cashier. At the end of the fixed period, the petty cash book after being totaled and balanced is presented by the petty cashier to the chief cashier for a fresh cheque.

The advantages of the imprest system of book keeping in business for maintaining petty cash with examples are as follows:‑

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What are the advantages of using the Imprest system?

01/02/2015
06:30 | Author: Caitlin White

Imprest system of petty cash book
What are the advantages of using the Imprest system?

The advantages of using the Imprest system are versatility, accountability, practicality, limitation of theft, ease of use and limitation of expenditure. The system is a.

The advantages of using the Imprest system are versatility, accountability, practicality, limitation of theft, ease of use and limitation of expenditure. The system is a form of managing petty cash in a business.

This contrasts the manual evaluation of information, which involves writing out the data by hand and doing time consuming calculations. The main advantages of an accounting information system are the increased speed of processing the numbers, efficient organization, and classification and safety of inputted data.

Using Imprest, the petty cash of a company is kept at a constant rate. Checks do not need to be written for small purchases and theft is easily tracked by a simple count at the end of the day or at the end of each shift. Each time money is withdrawn, a voucher must be placed in the cash box to account for any missing funds. This can be handled by a junior member of the staff, making it simpler for management. The amount of cash on hand can change depending on the needs of the business.

A good example of an imprest account is a petty cash system that may be replenished on a daily, weekly or monthly basis. An imprest account is one that holds a fixed amount of money and is replenished after a certain period of time.

A manual accounting system is a way of keeping business financial records with a written ledger of transactions. Computers and software are not used as part of a manual system.

Trade credit is an arrangement between a supplier and a business to receive goods or services while delaying cash payment until a later date. The greatest advantages of trade credit to businesses include the availability of zero percent financing and potential discounts on needed goods, while the biggest disadvantage is the risk of late payment fees.

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The Imprest System Principles of Accounts Singapore

01/02/2015
04:05 | Author: Kate Thompson

Imprest system of petty cash book
The Imprest System Principles of Accounts Singapore

Advantages of the Imprest System of keeping petty cash. The Petty Cash Book is used to record small payments. Such payments include.

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The advantage of keeping a Petty Cash Book is that the - Angelfire

01/02/2015
02:40 | Author: Caitlin White

Imprest system of petty cash book
The advantage of keeping a Petty Cash Book is that the - Angelfire

One of the most common methods is called the Imprest System. Here the Chief Cashier gives the Petty Cashier a cheque for a fixed amount, say $100, at the.

The advantage of keeping a Petty Cash Book is that the work of the Chief Cashier who is in charge of the Bank Cash Book can be made lighter. A junior man can be appointed to be in charge of the petty cash.

Here the Chief Cashier gives the Petty Cashier a cheque for a fixed amount, say $100, at the beginning. The Petty Cashier will then make cash payments from this float. This $100 is called the float (or imprest amount) and it can vary according to the needs of the office. There are many ways of operating the petty cash in an office. One of the most common methods is called the Imprest System.

It always begins the period with the same imprest amount that it had at the beginning of the previous period. Thus, the Petty Cashier will again start the next period with $100.

The Chief Cashier will then reimburse him with another cheque for $60, after checking all the receipts and petty cash vouchers (or dockets). At the end of a suitable period, say a week, he will total up the amount he has paid out from the petty cash. If this amounts to $60, he still has a balance of $40 cash with him.

Also, it simplifies the work of posting these items to the ledger. The advantage of having analysis columns for payments is that it enables the business to see at a glance, how much was spent on each major item of petty cash.

The Petty Cash Book is debited when the Petty Cashier receives money from the Chief Cashier and it is credited when payments are made from the petty cash. The Petty Cash Book is a part of the ledger, and the petty cash balance should appear in the Balance Sheet as current asset.

The Imprest System is very useful in controlling and monitoring the flow of petty cash payments.

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What are the advantages of a Imprest system for petty cash

01/02/2015
12:35 | Author: Kate Thompson

Imprest system of petty cash book
What are the advantages of a Imprest system for petty cash

Imprest system of petty cash is used for more control over cash in hand as in imprest system the amount in hand as well as the amount of all receipts should be.

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