The petty cash fund is an amount, which is maintained by government office for making payments of small expenditures like refreshment, newspapers, postal stamp, taxi fare etc. These types of expenditures occur in government offices frequently. For making payment of such small amount of expenditures in cash, a fund is created by the office, which is known as petty cash fund. All the petty expenses are paid through this fund. These expenses are recorded in a separate book systematically which is known as petty cash book. It has been designed under the format of AGF No. 22.
At the beginning of the fiscal year, the petty cash fund is created. At the end of each month, the petty cash fund is reimbursed. At the end of the fiscal year, the petty cash fund is closed by depositing the surplus amount in the bank.
The petty cash fund can be operated in the following two ways: -
The petty cashier is given a certain amount of cash usually at the beginning of the accounting year under ______.
special system of petty cash fund
simple system of petty cash fund
imprest system of petty cash fund
ordinary system of petty cash fund
Imprest system of petty cash fund is better than the ordinary system because ______.
all the options are correct
It does not allow the petty cashier to keep idle cash with him as the float can be reduced if found more than necessary.
It helps in timely reporting and checking. Thus, the errors, if any, can be rectified by the main cashier soon.
It helps ultimately for effective control of the mis-utilization of the petty cash fund.
At the ______ of the fiscal year, the petty cash fund is created.