Petty Cash Book Quiz

What is petty cash primarily used for?

• Large business transactions

• Small or minor payments

• Monthly salary payments

• Investment purposes

Which document serves as the source for making entries into the Petty Cash Book?

• Bank statement

• Invoice

• Petty cash voucher

• Receipt book

Why is a petty cash system practical for businesses?

• It helps track large investments

• It creates more work for accountants

• It requires complex documentation

• It reduces cashbook entries for small payments

What is the term for the fixed amount given to the petty cashier under the imprest system?

• Capital

• Float

• Revenue

• Dividend

Which of the following is NOT typically covered by petty cash?

• Postage expenses

• Employee salaries

• Cleaning supplies

• Stationery items

When petty cash is initially given, how is it recorded?

• Credited in petty cash book, debited in main cash book

• Credited in main cash book, debited in petty cash book

• Credited in both books

• Debited in both books

What happens after the petty cash book is balanced?

• The cashier keeps the remaining balance

• The float is increased permanently

• The amount spent is reimbursed

• The account is closed permanently

How are petty cash expenses recorded in the analysis columns?

• Only the total payment is recorded

• Each voucher amount is entered in appropriate columns

• Only monthly totals are recorded

• Expenses are recorded annually

Who typically manages the petty cash system in an organization?

• Senior accountant

• CEO

• Junior clerk/petty cashier

• Board of directors

What is the final step in the petty cash book balancing process?

• Adding all expenses

• Calculating the float

• Recording new expenses

• Carrying down the remaining balance