How to prepare a petty cash book applying IMPREST principle.
Meaning of the Imprest Principle The imprest principle is a system of controlling petty cash whereby a fixed sum of money is given to the petty cashier at the beginning of a period. At the end of the period, the petty cashier is reimbursed with exactly the amount spent so that the petty cash balance is restored to its original fixed amount. Definition of the Imprest System The imprest system of petty cash is a method under which a predetermined amount of money is advanced to the petty cashier, and after accounting for all petty cash expenditures during a specific period, the amount spent is refunded to bring the balance back to the original imprest amount. Objectives of the Imprest System The imprest system is adopted in organizations for the following reasons: 1. To ensure proper control of petty cash expenditure 2. To reduce the risk of misuse and fraud 3. To simplify the recordi...