Imprest System of Petty Cash

Imprest System of Petty Cash :

Under this system, an estimate is made of amount required for petty expenses for a period (say for a week, a fortnight or a month). The amount so ascertained is given to the Petty Cashier in the beginning of a period.

The amount paid by him during the period. Thus, he will again have the fixed amount in the beginning of the new period reimbursed. This amount is called imprest money.

This system of paying advance in the beginning and reimbursing the amount spent from time to time is called imprest system.

Advantages of Imprest System of Petty Cash

(i)                   Control Over Mistakes: The Petty Cash Book is checked by the cashier at regular intervals so that a mistake, if committed, is soon rectified.

(ii)                  Control Over Petty Expenses: Petty expenses are kept within the limits of imprest since the petty cashier can never spend more than the available petty cash.

(iii)                 Control Over Fraud: Under this system defalcation of cash can be minimized since the Petty Cashier is not allowed to draw cash as and when he desires.

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