Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment tickets)totaling the same amount.What is this system called?
A) A control system
B) A voucher system
C) A balanced system
D) An imprest system

Question

Quizplus · Accepted Answer

This system is called an imprest system, where a fixed amount of money is kept in the petty cash account and replenished only when the fund reduces to a predetermined minimum balance. This ensures control over the petty cash and prevents fraud and misuse. Option A, control system, is not specific enough to describe this system. Option B, voucher system, refers to a system of document control and approval for expenses, which may be used in conjunction with an imprest system. Option C, balanced system, is not a commonly used term in accounting and does not accurately describe this system.

Petty Cash Is Accounted for by Maintaining a Constant Balance