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05 July 2012 What is an imprest system?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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06 July 2012 Imprest System is the perfect system for paying cash petty expenditures. In this system, accountant sets the month or week and he pays fixed amount to his assistant clerk for paying day to day small expenditures. Now, assistant clerk pays all small expenditures and records in petty cash book. Now, after closing the fixed period, accountant replenishes the money which has been actually paid by assistant clerk for day to day small expenses. After this, assistant clerk will become imprest cash for next month small expenditures. So, this system is called imprest system of petty cash.
For example, accountant pays Rs 100 to his assistant clerk for small expenditures for a month. But assistant clerk paid only Rs 80 for small expenses. After investigation, accountant will give only Rs 80 to assistant clerk. Now, assistant clerk will have Rs 100. Suppose, next month, he pays Rs 95, then he will replenish Rs 95 not Rs 100.

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