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An imprest account is one that always has the same balance; an exact amount of cash in deposited into the account for a known specific future purpose (such as an upcoming payroll), and the same amount leaves the account when the funds for that purpose are expended.
The best example is Petty Cash. To start a Petty Cash fund, a firm initially writes and cashes a check for $250 (Dr. Petty Cash, Cr. Operating Account Cash), and puts the $250 cash in the office Petty Cash box. When a small purchase is made by an employee for the office (for stamps, etc), the employee is reimbursed from the Petty Cash box, and puts her receipt for the amount she was reimbursed in the Petty Cash box. The total in the box, between cash and receipts, is always $250.
When the amount of petty cash left on hand in the office gets low and the Petty Cash funds must be replenished, the company writes and cashes a check for an amount equal to the total of all the receipts in the box, debiting the appropriate expense accounts and crediting Operating Account Cash. Cash in the amount of the check goes into the Petty Cash box, to bring the total Petty Cash back up to $250. No entry is made to the Petty Cash account since its balance should always be the original amount funded (in this example, $250).
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What is imprest amount in accounts?
The imprest account is a petty cash account.
How are you use of imprest in tally?
Imprest Account in under loan and advance group
Who manages an imprest account?
An imprest account is an account which allows the sum of money to be given as an advance payment to someone to carry out an expenses as the case may be. This type of account is usually retired in which the person who spent the money will analyse how the money was spent.
What is an imprest account?
(i) An account into which a fixed amount of money is placed for the purpose of making change or minor disbursements. (ii) An imprest account is one that always has the same balance; an exact amount of cash in deposited into the account for a known specific future purpose (such as an upcoming payroll), and the same amount leaves the account when the funds for that purpose are expended. (iii) In the United Kingdom, a record of the transactions of a type of petty cash system. An employee is given an advance of money, an imprest, for incidental expenses and, when most of it has been spent, he or she presents receipts for the expenses to the accounts department and is then reimbursed with cash to the total value of the receipts.
How do you record entries using the imprest fund system?
debit all the necessary expenses credit the appropriate cash account
Can we use another system aside from imprest system?
no we don't have any other system other than imprest system
What is impress account?
An imprest account is an account that always has the same balance. There are usually no entries made to this type of account (unless you wanted to increase or decrease the imprest amount). A good example is Petty Cash. You open the account by writing a check for, say $250. (Debit Petty Cash, Credit Cash.) The funds are kept in a locked cash box and used to make small incidental purchases (stamps, donuts for a company meeting, etc.). A receipt or voucher is placed in the cash box for each purchase. The cash box always contains $250 in cash and receipts. When the amount of cash is getting low (perhaps under $20), A check is written (and cashed) to replenish the petty cash box. The debits are to the various expense accounts (Postage, Office Expense, etc.) and the credit is to Cash (just like any other check). Then, the cash box is back to $250 in cash and no receipts (they were attached to the check stub). As you see, there was not a second entry to the Petty Cash account. Some companies will have a separate checking account for Payroll which is an imprest account. The account is opened in the same fashion and each pay period, the exact total amount needed for payroll is transferred to that account. The payroll expenses and tax liabilities are recorded in total (as opposed to posting each individual paycheck) and the offset is to the account where the transfer originated. Again, no entries are made to the imprest account.
Explain the petty cash book and how the imprest system works?
Petty cash us cash held in the form of coins and notes. It is used to pay the small incidental expenses incurred by a business. Imprest system which is based on a pre-set float being maintained the imprest amount.
Identify advantages of imprest system?
There are many advantages of imprest system. One is that the cash is limited so the chances of losing money are limited. This type helps in managing and accounting for petty cash.
What are the advantages of a Imprest system for petty cash?
An Imprest system of petty cash is used for more control over cash in hand. In an Imprest system, the amount in hand plus the amount of all receipts should be equal to petty cash balance. If at any time cash in hand and receipts do not equal the fixed amount of petty cash, then investigation should be done about the discrepancy.
What do the meaning of BO account?
BO ACCOUNT means beneficiary owner account
What are the importance of petty cash imprest system?
it helps to meet the day to day activities.
