ICANFinancial AccountingDouble Entry and Books of Prime Entry2025

Adaeze Limited's petty cash book operates on the imprest system with a float of ₦50,000. During the month, the following payments were made: stationery ₦8,500; refreshments ₦6,200; courier services ₦4,300; and sundry expenses ₦7,000. What amount must be reimbursed to restore the imprest, and what is the correct double entry for the reimbursement?

A₦26,000; Dr Petty Cash ₦26,000; Cr Bank ₦26,000CORRECT
B₦24,000; Dr Petty Cash ₦24,000; Cr Bank ₦24,000
C₦50,000; Dr Petty Cash ₦50,000; Cr Bank ₦50,000
D₦26,000; Dr Bank ₦26,000; Cr Petty Cash ₦26,000
AI
Toaster Teacher
Why the answer is A, and why the others tempt you.
Total payments = ₦8,500 + ₦6,200 + ₦4,300 + ₦7,000 = ₦26,000. Under the imprest system, the reimbursement equals total expenditure to restore the float to ₦50,000. The double entry for reimbursement is Dr Petty Cash ₦26,000 (restoring cash) and Cr Bank ₦26,000 (reducing the main bank balance). Option D incorrectly reverses the entries.
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