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Outline the advantages of the imprest system as a system to maintain for cash payments.

Outline the advantages of the imprest system as a system to maintain for cash payments.

Answers

Judy
a) The fixed balance prevents escalation of the amount held, so the amount at risk can be kept small.
b) The system is self checking because each time a reimbursement is required the petty cashier must present his records to the official responsible for examination.
c) Reconciliation of petty cash book is made easier. The amount of the imprest should be as low as possible and the number of floats in use should be kept to a minimum. IOU should not be allowed nor should staff cheques be cashed out of petty cash. No other receipts should go into the petty cash. At the time of the reimbursement, the responsible official should check the petty cash book with the supporting vouchers and should sign it accordingly. Regular surprise cash counts can usefully be made. The accountant has to be on the look out for use of falsified vouchers and the representation of used vouchers. A properly run imprest system is reasonably well protected from material fraud.
Judiesiz answered the question on August 16, 2018 at 19:49

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