Rasheed began trading on 1 October 2021. In the business, he keeps a petty cash book. At the start of each month, the imprest is replenished to $100.
The petty cash transactions for September 2022 were:
September 2 Settled taxi fare $12
September 7 Paid purchases ledger account of Crystal $16
September 13 Purchased postage stamps $10
September 18 Paid purchases ledger account of Kalpa $15
September 25 Settled bus fare $5
September 29 Paid cleaner $28
(a)[2]
State two benefits of keeping a petty cash book.
(b)[8]
Complete Rasheed’s petty cash book for September 2022 on the next page. Balance the petty cash book and carry the balance forward on 1 October 2022. Make the amount needed to restore the imprest clear.
(c)[2]
Enter the transactions that would be posted to the accounts below in September 2022. You do not need to total or balance the accounts.
(d)[2]
Prepare the inventory account as at 30 September 2022. Balance the account and carry down the balance on 1 October 2022.
(e)[6]
At the close of his first year in business, Rasheed wants to compare his financial performance with that of other businesses. Explain to Rasheed three problems of inter-firm comparison.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Cuts down the number of entries in the main cash book” …