Question

An imprest petty cash fund:

A) Is a bank account
B) Is used for large unusual purchases
C) Is usually reimbursed at least once a week for good internal control
D) Is being replace by pre-approved pruchase cards in many companies

Answer 1

An imprest petty cash fund is a system used by companies to manage small, routine expenses. It is not a bank account and is usually reimbursed at least once a week to ensure good internal control. It is being replaced by pre-approved purchase cards in some companies.

Step-by-step explanation:

An imprest petty cash fund is a system used by companies to manage small, routine expenses. It is a type of account that is used to hold a small amount of cash to cover day-to-day expenses, such as office supplies or minor repairs. The fund is typically reimbursed at least once a week to ensure good internal control and prevent misuse of funds.

This option for managing cash expenses is different from a bank account because it is not held by a financial institution. Instead, it is held internally by the company. The purpose of an imprest petty cash fund is to provide an easy and convenient way to handle small expenses without the need for formal approval or paperwork.

In some companies, imprest petty cash funds are being replaced by pre-approved purchase cards, which are similar to credit cards but have specific limits and restrictions on the types of purchases that can be made. These cards provide better control over expenses and reduce the need for handling cash.