Question

Seve 1 of 5 (2 complete) HW Score: 29.18%, 7.29 of 25 P7-25A (book/static) Question Help On June 1, Fab Salad Dressings creates a petty cash fund with an imprest balance of $300. During June, Al Franklin, the fund custodian, sis the following petty cash tickets: !!! (Click the icon to view the petty cash tickets.) On June 30, prior to replenishment, the fund contains these tickets plus cash of $90. The accounts affected by petty cash payments are Office Supplies, Travel Expense, Delivery Expense, Entertainment Expense, and Merchandise Inventory. Read the requirements. Requirement 1. Explain the characteristics and the internal control features of an imprest fund. An imprest fund has balance at all times, which equals the sum of payments from the fund. The internal control feature of an imprest fund is that it responsible W plus the that support the amount of money for which the fund custo Click to select your answer(s) and then click Check Answer Clear All 5 parts remaining acer

Answer 1

A imprest fund has a same balance (Note-1) at all times, which equals the sum of cash in the fund plus the total of tickets (Note-2) that support payment from the funds.The internal control feature of an imprest fund is that it clearly identifies (Note-3) the amount of money for which the fund custodian is responsible

Note - An imprest fund is a small amount of cash that is set aside for use in paying for incidental expenses. The fund is typically stored in a box or drawer, and is controlled by a custodian who has the authority to make payments. When a payment is made, the custodian hands out cash and replaces it with a voucher that states the purpose of the payment.When cash in the fund is at low level it gets replenished.

1.The imprest balance states the initial cash distribution to a petty cash account, and does not subsequently change unless the total amount of cash allocated to the petty cash box changes. It is the cash account that gets credited on payment for any incidental expense hence, the balance of imprest would never change (i.e would have same balance at all times)

2.On payment for incidental expense the cash in the fund is replaced with the invoice of the expense, hence the fund balance would equal cash in the fund and the total of tickets supporting payments fro incidental expense.

3.Since the balance of the fund never changes (unless and until there is a change in the limit of the fund) the custodian is informed of the amount available with him for incidental expenditure and thus help to fix responsibility levels.