Definition of Imprest System
This is a system usually used by most organisations to maintain the petty cash book.
The imprest system states that the petty cashier is given a sum of money, usually from the chief cashier, from which payments are made. This payment is called a cash float, whatever amount is spent by a petty cashier during a period must be given back to the petty cashier to maintain the float.
If a petty cashier is given an imprest, N500 on January 1, and by January 31 he paid out N450, the petty cashier’s balance is N50. The main cashier will reimburse the petty cashier N450 after checking the payment vouchers to restore the imprest.
The original amount given to the petty cashier is called an imprest.
|Jan 1||Imprest/Cash float||500|
|Jan 31||Paid voucher for minor|
|Jan 31||Petty cash balance||50|
|Jan 31||Reimbursement by main|
|Jan 31||Imprest/Cash float restored||500|