Leo keeps a petty cash book under the imprest system. The imprest total, which is $200, is topped up on the first day of every month.
Any cash payment of less than $100 is taken from petty cash. Any cash receipt of less than $100 is paid into petty cash.
On 1 April 2021 Leo had $48 in his petty cash box. Leo supplied the following details for April 2021.
April 1 Replenished petty cash imprest from the business bank account
April 5 Paid for office cleaning, $21
April 7 Paid for train ticket, $13
April 13 Paid $72 to Hunter, a trade payable
April 18 Paid taxi fare, $14
April 25 Received cash, $11, from Conrad, a trade receivable
(a)[10]
Complete Leo’s petty cash book for April 2021 on page 3. Balance the petty cash book and carry the balance down on 1 May 2021.
(b(i))[2]
State the ledger in which each of the following would be posted. The total of the travel expenses column. The payment to Hunter.
(b(ii))[1]
Name the accounting principle that is used when figures from the petty cash book are posted to the correct ledgers.
(c)[2]
State two purposes of sending this statement to Leo.
(d)[5]
Advise Leo whether he should make this change. Justify your response by giving two advantages and two disadvantages.
Worked solution & mark scheme
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