What are the funds in a petty cash account called?

What are the funds in a petty cash account called?

• A. Petty cash
• B. Cash on hand
• C. General funds
• D. Imprest Funds

Answer: (D)

Imprest funds are the funds in a petty cash account because the imprest system keeps a fixed, replenishable cash balance for small expenditures. As you spend, you issue receipts for each disbursement and maintain the fund at that original fixed amount. When you replenish, you restore the balance to the set imprest amount, keeping tight control and easy auditability of petty cash activity. Other terms don’t fit this specific accounting concept: petty cash refers to the fund itself, cash on hand is simply the physical money available, and general funds are broader operating funds. Imprest funds is the formal label for the petty cash balance maintained in this way.

Imprest funds are the funds in a petty cash account because the imprest system keeps a fixed, replenishable cash balance for small expenditures. As you spend, you issue receipts for each disbursement and maintain the fund at that original fixed amount. When you replenish, you restore the balance to the set imprest amount, keeping tight control and easy auditability of petty cash activity. Other terms don’t fit this specific accounting concept: petty cash refers to the fund itself, cash on hand is simply the physical money available, and general funds are broader operating funds. Imprest funds is the formal label for the petty cash balance maintained in this way.