Shvan keeps a petty cash book under the imprest system. The imprest amount is $200, and it is topped up each Wednesday.
Any payment below $75 is taken from petty cash. Any cash receipt below $75 is put into petty cash.
On 1 March 2023, Shvan had $61 in his petty cash box. He gave the following details for the first week of March 2023.
March
1 Replenished petty cash imprest from the business bank account
2 Paid $55 to Giles, a trade payable
3 Paid taxi fare, $21
6 Paid $18 for notepads and pens
6 Received cash, $25, from Mitchell, a trade receivable
7 Paid $30 for office cleaning
(a)[10]
Prepare Shvan’s petty cash book for the first week of March 2023. Balance the petty cash book at 7 March 2023 and carry the balance down at 8 March 2023.
(b)[4]
Prepare the account for Giles as it would be shown in Shvan’s books. Balance the account at 31 March 2023 and carry the balance down at 1 April 2023.
(c(i))[1]
State one alternative way Shvan could pay his suppliers from his bank account, apart from by cheque.
(c(ii))[5]
Advise Shvan whether he should stop using cash. Support your answer by giving two advantages and two disadvantages of no longer using cash.
Worked solution & mark scheme
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