Petty Cash – Knowsia

FA – Nov 2021 – L1 – SB – Q4 – Accounting Concepts

This question involves explaining different bases of accounting and the operation of a petty cash book.

Question

a. Accounting concepts are the broad principles and general assumptions underlying the preparation of financial statements.

Required:
i. Explain cash, accrual, and break-up bases of accounting. (6 Marks)
ii. State FOUR limitations associated with the cash basis of accounting. (8 Marks)

b. Mallam Isa is considering setting up a petty cash book from which to pay small expenses, however, he is not sure of how a petty cash book operates.
Required:
Explain to Mallam Isa the operation of a petty cash book. (6 Marks)

Answer

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Tags: Accounting Concepts, Accruals, Cash Basis, Petty Cash
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2021

FA – Nov 2021 – L1 – SA – Q14 – Accounting Concepts

This question identifies the fixed amount given to a petty cashier.

Question

The fixed amount of money given to a petty cashier at the beginning of a period is called:
A. Float
B. Imprest
C. Petty cash
D. Cash received
E. Cash advance

Answer

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Tags: Imprest System, Multiple Choice, Petty Cash
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2021

FA – Nov 2022 – L1 – SA – Q14 – Recording Financial Transaction

Identify the correct term for the fixed amount of money given to a petty cashier.

Question

The fixed amount of money given to a petty cashier at the beginning of a period is called
A. Float
B. Imprest
C. Petty cash
D. Cash received
E. Cash advance

Answer

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Tags: Cash Management, Financial Records, Petty Cash
Level: Level 1

Topic: Recording Financial Transactions
Series: NOV 2022

FA – Nov 2019 – L1 – SA – Q14 Control Accounts

Identify the statement that does not explain the imprest system of petty cash.

Question

The following explains the imprest system of operating petty cash, EXCEPT:

A. Weekly expenditure cannot exceed a set amount
B. The exact amount of expenditure is reimbursed at intervals to maintain a fixed float
C. The petty cashier collects revenue on behalf of the organization
D. A petty cashier receives cash, makes expenses of relatively small amounts, and maintains records for the transactions
E. Regular equal amounts of cash are transferred into petty cash at regular intervals

Answer

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Tags: Accounting Process, Imprest System, Petty Cash
Level: Level 1

Topic: Control Accounts
Series: NOV 2019

FA – Mar/July 2020 – L1 – SA – Q9 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Calculating the amount to be reclaimed under the imprest system

Question

The following is a summary of the petty cash transactions for a week:

Opening balance: N50,000
Sales of stamps: N10,000
Sales of paper: N50,000
Travelling expenses: N150,000
Subsistence expenses: N250,000

What sum should be reclaimed by the cashier at the end of the week?
A. N550,000
B. N500,000
C. N400,000
D. N340,000
E. N160,000

Answer

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Tags: Imprest, Petty Cash, Reimbursement
Level: Level 1

FA – Mar/July 2020 – L1 – SA – Q3 – Recording Financial Transactions

Definition of imprest system

Question

What is an imprest system?
A. Records of the use of an entity’s resources
B. It is part of computerised accounting
C. A system where an accountant pays for expenses, maintains and provides records of the expenses at a regular interval
D. Helps to control petty cash by making available a fixed amount of money at a regular interval
E. Helps to reconcile the cash book with the bank statement

Answer

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Tags: Expense Control, Imprest System, Petty Cash
Level: Level 1

AA – Mar 2024 – L2 – Q5b – Internal Audit and Its Relationship with External Audit

Recommend internal control procedures for cheque payments and petty cash systems for Automaga Ltd.

Question

Automaga Ltd has recently acquired the controlling interest in Alkars Ltd, who are importers of car spare parts. In reviewing the organisational structure of Alkars Ltd, Automaga Ltd noticed a weakness in the procedures for the signing of cheques and the operation of the petty cash system. Automaga Ltd engaged you as the company’s auditor and requested that you review the controls over cheque payments and petty cash. Cheques are drawn almost every week and the petty cash account normally has a working balance of about GH¢600, and GH¢1,200 is expended from the fund each month.

Required:
Prepare a letter to Automaga Ltd highlighting your recommendations for good internal control procedures for:
i) Cheque payments. (5 marks)
ii) Petty cash. (5 marks)

Answer

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Tags: Cash Management, Cheque Payments, Internal Control, Petty Cash
Level: Level 2

Topic: Internal Audit and Its Relationship with External Audit
Series: MAR 2024

FA – May 2021 – L1 – Q3 – Bank reconciliations

Preparation of an adjusted cash book, bank reconciliation statement, and explanation of the petty cash book operations.

Question

a) On 4 April 2020, Kofi Ntam received his bank statements for the month ended 31 March 2020. The bank statement showed a balance of GH¢417,400 (overdraft) as at 31 March, whilst the cash book showed a balance of GH¢525,990 (credit) as at that date. Upon examination of the cash book and the bank statement, the following were discovered:

Bank charges of GH¢2,010 had not been recorded in the cash book.
Kofi Ntam exceeded his overdraft limit during the month of March. The bank had therefore charged a penalty of GH¢2,500. This has not been recorded in the cash book.
A sum of GH¢12,500 had been wrongly credited to Kofi Ntam’s bank account by the bank.
A cheque for GH¢12,300 had been returned by the bank as dishonored. As the cheque had been dishonored, the bank charged Kofi Ntam GH¢150. This has not reflected in the cash book.
Cash receipts of GH¢37,400 were posted as cash payment of GH¢47,300 in the cash book.
On 21 March, Kofi Ntam deposited an amount of GH¢6,500 into his personal bank account. This was deposited to the business bank account in error by the bank.
Standing orders and direct debits of GH¢11,150 had not been posted to the cash book.
Customers had deposited GH¢21,700 directly to the bank account. This has not been recorded in the cash book.
Receipts of GH¢51,200 deposited to the bank account on 31 March 2020, had not been credited by the bank.
The following cheques, drawn on the bank account, had not been presented to the for payment as at 31 March 2020:

Cheque Number	Date Cheque was Written	Amount (GH¢)
No. 45280	11 March 2020	8,400
No. 45350	28 March 2020	17,400
No. 45370	31 March 2020	36,700

Required:
i) Prepare the adjusted cash book for the month of March 2020.
(8 marks)

ii) Prepare a statement on 31 March 2020 reconciling the adjusted cash book with the bank statement balance.
(6 marks)

iii) Explain TWO (2) reasons for preparing bank reconciliation on a regular basis.
(2 marks)

b) A petty cash book is created to facilitate small payments in a business or organization. It is meant to meet the day-to-day expenses and it is entrusted into the hands of the petty cashier.

Required:
Prepare a brief note to Kofi Ntam explaining how the petty cash book operates.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjusted Cash Book, Bank Reconciliation, Cash Book, Petty Cash
Level: Level 1

Topic: Bank reconciliations

FA – Nov 2021 – L1 – SB – Q4 – Accounting Concepts

This question involves explaining different bases of accounting and the operation of a petty cash book.

Question

a. Accounting concepts are the broad principles and general assumptions underlying the preparation of financial statements.

Required:
i. Explain cash, accrual, and break-up bases of accounting. (6 Marks)
ii. State FOUR limitations associated with the cash basis of accounting. (8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Concepts, Accruals, Cash Basis, Petty Cash
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2021

FA – Nov 2021 – L1 – SA – Q14 – Accounting Concepts

This question identifies the fixed amount given to a petty cashier.

Question

The fixed amount of money given to a petty cashier at the beginning of a period is called:
A. Float
B. Imprest
C. Petty cash
D. Cash received
E. Cash advance

Answer

Find Related Questions by Tags, levels, etc.

Tags: Imprest System, Multiple Choice, Petty Cash
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2021

FA – Nov 2022 – L1 – SA – Q14 – Recording Financial Transaction

Identify the correct term for the fixed amount of money given to a petty cashier.

Question

The fixed amount of money given to a petty cashier at the beginning of a period is called
A. Float
B. Imprest
C. Petty cash
D. Cash received
E. Cash advance

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Management, Financial Records, Petty Cash
Level: Level 1

Topic: Recording Financial Transactions
Series: NOV 2022

FA – Nov 2019 – L1 – SA – Q14 Control Accounts

Identify the statement that does not explain the imprest system of petty cash.

Question

The following explains the imprest system of operating petty cash, EXCEPT:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Process, Imprest System, Petty Cash
Level: Level 1

Topic: Control Accounts
Series: NOV 2019

FA – Mar/July 2020 – L1 – SA – Q9 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Calculating the amount to be reclaimed under the imprest system

Question

The following is a summary of the petty cash transactions for a week:

Opening balance: N50,000
Sales of stamps: N10,000
Sales of paper: N50,000
Travelling expenses: N150,000
Subsistence expenses: N250,000

What sum should be reclaimed by the cashier at the end of the week?
A. N550,000
B. N500,000
C. N400,000
D. N340,000
E. N160,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Imprest, Petty Cash, Reimbursement
Level: Level 1

FA – Mar/July 2020 – L1 – SA – Q3 – Recording Financial Transactions

Definition of imprest system

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Expense Control, Imprest System, Petty Cash
Level: Level 1

AA – Mar 2024 – L2 – Q5b – Internal Audit and Its Relationship with External Audit

Recommend internal control procedures for cheque payments and petty cash systems for Automaga Ltd.

Question

Required:
Prepare a letter to Automaga Ltd highlighting your recommendations for good internal control procedures for:
i) Cheque payments. (5 marks)
ii) Petty cash. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Management, Cheque Payments, Internal Control, Petty Cash
Level: Level 2

Topic: Internal Audit and Its Relationship with External Audit
Series: MAR 2024

FA – May 2021 – L1 – Q3 – Bank reconciliations

Preparation of an adjusted cash book, bank reconciliation statement, and explanation of the petty cash book operations.

Question

Bank charges of GH¢2,010 had not been recorded in the cash book.
Kofi Ntam exceeded his overdraft limit during the month of March. The bank had therefore charged a penalty of GH¢2,500. This has not been recorded in the cash book.
A sum of GH¢12,500 had been wrongly credited to Kofi Ntam’s bank account by the bank.
A cheque for GH¢12,300 had been returned by the bank as dishonored. As the cheque had been dishonored, the bank charged Kofi Ntam GH¢150. This has not reflected in the cash book.
Cash receipts of GH¢37,400 were posted as cash payment of GH¢47,300 in the cash book.
On 21 March, Kofi Ntam deposited an amount of GH¢6,500 into his personal bank account. This was deposited to the business bank account in error by the bank.
Standing orders and direct debits of GH¢11,150 had not been posted to the cash book.
Customers had deposited GH¢21,700 directly to the bank account. This has not been recorded in the cash book.
Receipts of GH¢51,200 deposited to the bank account on 31 March 2020, had not been credited by the bank.
The following cheques, drawn on the bank account, had not been presented to the for payment as at 31 March 2020:

Cheque Number	Date Cheque was Written	Amount (GH¢)
No. 45280	11 March 2020	8,400
No. 45350	28 March 2020	17,400
No. 45370	31 March 2020	36,700

Required:
i) Prepare the adjusted cash book for the month of March 2020.
(8 marks)

ii) Prepare a statement on 31 March 2020 reconciling the adjusted cash book with the bank statement balance.
(6 marks)

iii) Explain TWO (2) reasons for preparing bank reconciliation on a regular basis.
(2 marks)

b) A petty cash book is created to facilitate small payments in a business or organization. It is meant to meet the day-to-day expenses and it is entrusted into the hands of the petty cashier.

Required:
Prepare a brief note to Kofi Ntam explaining how the petty cash book operates.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjusted Cash Book, Bank Reconciliation, Cash Book, Petty Cash
Level: Level 1

Topic: Bank reconciliations

Question Tag: Petty Cash

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FA – Nov 2021 – L1 – SB – Q4 – Accounting Concepts

This question involves explaining different bases of accounting and the operation of a petty cash book.

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q4 – Accounting Concepts"

FA – Nov 2021 – L1 – SA – Q14 – Accounting Concepts

This question identifies the fixed amount given to a petty cashier.

You're reporting an error for "FA – Nov 2021 – L1 – SA – Q14 – Accounting Concepts"

FA – Nov 2022 – L1 – SA – Q14 – Recording Financial Transaction

Identify the correct term for the fixed amount of money given to a petty cashier.

You're reporting an error for "FA – Nov 2022 – L1 – SA – Q14 – Recording Financial Transaction"

FA – Nov 2019 – L1 – SA – Q14 Control Accounts

Identify the statement that does not explain the imprest system of petty cash.

You're reporting an error for "FA – Nov 2019 – L1 – SA – Q14 Control Accounts"

FA – Mar/July 2020 – L1 – SA – Q9 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Calculating the amount to be reclaimed under the imprest system

You're reporting an error for "FA – Mar/July 2020 – L1 – SA – Q9 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)"

FA – Mar/July 2020 – L1 – SA – Q3 – Recording Financial Transactions

Definition of imprest system

You're reporting an error for "FA – Mar/July 2020 – L1 – SA – Q3 – Recording Financial Transactions"

AA – Mar 2024 – L2 – Q5b – Internal Audit and Its Relationship with External Audit

Recommend internal control procedures for cheque payments and petty cash systems for Automaga Ltd.

You're reporting an error for "AA – Mar 2024 – L2 – Q5b – Internal Audit and Its Relationship with External Audit"

FA – May 2021 – L1 – Q3 – Bank reconciliations

Preparation of an adjusted cash book, bank reconciliation statement, and explanation of the petty cash book operations.

You're reporting an error for "FA – May 2021 – L1 – Q3 – Bank reconciliations"

FA – Nov 2021 – L1 – SB – Q4 – Accounting Concepts

This question involves explaining different bases of accounting and the operation of a petty cash book.

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q4 – Accounting Concepts"

FA – Nov 2021 – L1 – SA – Q14 – Accounting Concepts

This question identifies the fixed amount given to a petty cashier.

You're reporting an error for "FA – Nov 2021 – L1 – SA – Q14 – Accounting Concepts"

FA – Nov 2022 – L1 – SA – Q14 – Recording Financial Transaction

Identify the correct term for the fixed amount of money given to a petty cashier.

You're reporting an error for "FA – Nov 2022 – L1 – SA – Q14 – Recording Financial Transaction"

FA – Nov 2019 – L1 – SA – Q14 Control Accounts

Identify the statement that does not explain the imprest system of petty cash.

You're reporting an error for "FA – Nov 2019 – L1 – SA – Q14 Control Accounts"

FA – Mar/July 2020 – L1 – SA – Q9 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Calculating the amount to be reclaimed under the imprest system

You're reporting an error for "FA – Mar/July 2020 – L1 – SA – Q9 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)"

FA – Mar/July 2020 – L1 – SA – Q3 – Recording Financial Transactions

Definition of imprest system

You're reporting an error for "FA – Mar/July 2020 – L1 – SA – Q3 – Recording Financial Transactions"

AA – Mar 2024 – L2 – Q5b – Internal Audit and Its Relationship with External Audit

Recommend internal control procedures for cheque payments and petty cash systems for Automaga Ltd.

You're reporting an error for "AA – Mar 2024 – L2 – Q5b – Internal Audit and Its Relationship with External Audit"

FA – May 2021 – L1 – Q3 – Bank reconciliations

Preparation of an adjusted cash book, bank reconciliation statement, and explanation of the petty cash book operations.

You're reporting an error for "FA – May 2021 – L1 – Q3 – Bank reconciliations"

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