Glossary
Imprest system
A way of running petty cash where the float is topped back up to a fixed amount each period.
What it means
A method of controlling petty cash in which the fund is restored to a fixed 'imprest' amount at the start of each period by reimbursing what was spent.
Example
With an RM200 imprest, if RM150 is spent, RM150 is reimbursed to restore RM200.
Why it matters
It makes petty cash easy to check: cash plus vouchers should always equal the imprest.
In practice
Under the imprest system, the petty cashier starts each period with a fixed float, say RM200. Small payments are recorded on vouchers. At the period end the cashier is reimbursed exactly the amount spent, so the float returns to RM200. The reimbursement is credited in the main cash book, and the analysis columns of the petty cash book feed the various expense accounts.
A useful control follows automatically. Vouchers plus cash remaining should always equal the imprest amount. If RM155 has been spent, RM45 in cash should remain, and RM155 is drawn to top up.
In the accounts, the closing petty cash balance appears as a current asset alongside bank and cash. In a non-imprest system, a round sum is handed over irregularly and the balance drifts. The fixed restore point of the imprest method shows total spending at once and makes errors easier to trace.
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Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 2.3 Books of prime entry (page 12).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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