SKANS School of Accountancy, Multan.

MA1 Petty Cash Batch: 51&53

Test 9 Total Time: 1 hour
Teacher: Muhammad Amjad Karim Total Marks: 64
Date:17/07/2020 Time:

MULTIPLE CHOICE QUESTIONS

Question # 01
which of the following is involved in small cash transaction?
A. Payments to service providers
B. Petty cash
C. Purchases of inventory
D. Receipts from sales
Question # 02
The original document used for recording petty cash into the petty cash book is:
A. An invoice
B. A till receipt
C. A petty cash i.o.u
D. .A petty cash voucher
Question # 03
David is a retailer of shoes. When cashing up at the end of a particular day, he finds that his
till roll which records daily sales is different from the amount of cash and cheques in the till of
$329.50 David always starts the day by placing a float of $40 in the till. He puts the remaining
difference down to giving a customer change for a $20 note when only a $10 note was
tendered. What sale did the till roll record for that day?
A. $279.50
B. $299.50
C. $359.50
D. $379.50
Question # 04
On a particular day, the cash register in a shop shows that cash sales were made of$1,073.21
The cash in the till at the end of the day totaled $1318.76 and a cash float of $250 is always
carried in the till. Which of the following is not a valid reason for the difference between the
Cash the till and the cash register records?
A. All of the cash received was not paid into the till.
B. Customer was given too much change.
C. The price for goods entered into the cash register was higher than that charged to the
customer
D. The price for goods entered into the cash register was lower than that charged to the
customer
Question # 05
A petty cash system operates on a $120 imprest system. At the end of a month, there are
$6723 of valid petty cash vouchers in the petty cash till. How much cash should be taken out
of the bank account in order to top up it to the correct amount?
A. $52.77
B. B.$67.23
C. $120.00
D. $187.23
Question # 06
A cash advance of $20 is taken out of the petty cash box by an employee of a company
refreshments for a client and an authorized voucher for $20 put into the petty cash box.
employee only spends $17.65 on refreshments. What is the petty cash procedure required?
A. The employee keeps the change of $2.35.
B. The employee keeps the change of $2.35 and the petty cash voucher is altered to
$17.65
C. The employee returns the $2.35.
D. The employee returns the $2.35 and the petty cash voucher is altered to ready 117.65
Question # 07
Hawk is preparing a bank paying-in slip at the end of the day in his shop. His till roll shows
sales of $193.24. Hawk always maintains a float of $25 in the till and takes $20 each day as
his wages. How much will Hawk pay into the bank today?
A. $213.24
B. $193.24
C. .$173.24
D. $148.24
Question # 08
For which of the following payments would petty cash not be used?
A. $9.50 for cleaning the shop windows
B. $26.00 for coffee and tea for office staff.
C. $85.00 invoice for postage via a courier
D. $37.00 train fare to a business conference
Question # 09
At the beginning of March the petty cash tin contained a float of $65. During the
month petty cash payments totaled $64 and a cheque for $50 was cashed at
the bank to top up the float what was the folat at the beginning of April
A. $1
B. $51
C. $75
D. $80
Question # 10
The petty cash box should be kept:
A. In a drawer
B. On the desk
C. In a safe
D. On a cabinet
Question # 11
What is the function of the petty cash?
A. To act as a cash float.
B. To cover all out of pocket expenses.
C. To pay small and/or irregular amounts.
D. To finance the office parties.
Question # 12
How can you ensure that petty cash payments have been made for valid expenditure ?
A. By recording the vouchers immediately in the petty cash book.
B. By ensuring the petty cash vouchers are signed
C. . By stapling appropriate receipts to the vouchers.
D. Allowing only certain employees to have access to petty cash,
Question # 13
Lassie withdraws .$300 from her business bank account for petty cash. How should this be
recorded in the general ledger?
A. Debit bank, Credit petty cash
B. Debit petty cash, Credit bank
C. Debit petty cash, Credit capital
D. No record is necessary
Question # 14
The petty cash in the sales office of Bram Limited is checked by someone in the accounts
department, who checks the petty cash vouchers and the amount of money in the petty cash
tin.The company uses an imprest system for its petty cash and petty cash is periodically
topped up to $500 the purpose of the check is to:
A. Make sure that the total value of the sales vouchers equals the amount of money in the
petty cash tin
B. Authorize all the petty cash vouchers,
C. Make sure that the total value of the sales vouchers plus the amount of money in the
petty cash tin equals $500
D. Make sure that the total value of the sales vouchers plus the amount of money petty
cash tin equals $500 plus any money transferred into petty cash in the period covered by
the vouchers
Question # 15
Walsh operates an imprest system for petty cash, and the float in the petty cash is topped
up to $250 at the end of each month. During April, employees paying for private use of the
office photocopier paid $25 into petty cash and chque for $20 were cashed for an employee
out of petty cash. During April, Walsh drew cheques for $340 for petty cash. How much
cash expenses?
A. $295
B. $345
C. $355
D. $385
 Question # 16
Which of the following records is often maintained on an imprest system?
A. A Cash book
B. Potty cash book
C. Journal
D. Sales day book
Question # 17
Expenses recorded in the petty cash book are posted,
A. A To the credit side of the supplier's personal accounts
B. To the credit of the nominal ledger expense accounts
C. To the debit of the nominal ledger expense accounts
D. To the debit of the main cash book
Question # 18
The petty cash can be checked at any time, even if the petty cash book is not update. Which
of the following formula is used for checking the petty cash?
A. Petty cash vouchers - cash held = imprest
B. Imprest + petty cash vouchers = cash held
C. Imprest + cash held = petty cash vouchers
D. Petty cash vouchers + cash held = imprest
Question # 19
A petty cash system is run with an imprest amount of $200. Each Saturday just before the
cash is topped up to $200, the amount of cash is counted and the vouchers in in the petty
cash box are totaled. On this particular Saturday, the cash in the petty cash box amount to
$97.80 and the petty cash vouchers $102.20. How much will be need to restore it to its
nominal amount of $200?
A $102.20
B. $97.80
C. 4.40
D. $200
Question # 20
The prime document used for recording petty cash into the petty cash books
A. An invoice
B. A till receipt
C. A petty cash io.u
D. A petty cash voucher
Question # 21
Which of the following is the best description of the term 'petty cash?
A. Small payments in cash not dealt with through the business bank account
B. Used to reimburse employees for expenditure undertaken for business purpose
C. Minor expenditure not subject to strict controls
D. Expenditure not subject to limits.
Question # 22
You are banking today's takings. Your till had a $50 float at the start of the day and this is to
be increased to $100. You count the cash as follows: $50 notes - 2; $20 notes - 10: $10 notes
- 37; $5 notes - 23; 10 bags of $20 $1 coins, other coinage $12, cheques $892. How much is
banked?
A. $1.939
B. $1,839
C. $1,889
D. $1,789
Question # 23
Which of the following are valid reasons for controlling the size of petty cash payments? (i)
security of cash, (i) controlling expenditure, (iii) risk of fraud, (iv) monitoring expenditure.
A. (i), (ii), (iii), (iv)
B. (i). (ii), (ii)
C. (ii), (iii), (iv)
D. (i), (iii), (iv)
Question # 24
A business has petty cash imprest of $250, expenditure in the month is $200 and the imprest
is to be increased to $300. How much cash must be drawn to restore and increase the
imprest?
A. S50
B. $300
C. S350
D. $250
Question # 25
which of the following items would be most likely to be paid out of petty cash?
(i) Payment to window cleaner $10
(ii) Hire purchase payment for a delivery van $123
(iii) A payment for postage stamps $11.60
A. All of the above
B. (i), (iii) and (iv)
C. (i) only
D. (i) and (iii)
Question # 26
Which of the following items will not be shown on a petty cash voucher?
A. Name and signature of person authorizing payment
B. Name and signature of recipient
C. Purpose of the expenditure and details.
D. Names and signature of petty cashier
Question # 27
which of the following is an example of a payment, which could be made out of petty cash?
(The petty cash float is $100),
A. Payment of an employee's parking fine whilst on company business - $25
B. Purchase of a concrete mixer - $275
C. The first installment of a lease agreement ($15 per month) for office equipment
D. Purchase of postage stamps - $7.57
Question # 28
A petty cash imprest is $500. A spot check by the auditors of the petty cash discovered cash
in hand of $45. In addition the cashier produced valid vouchers to the value of $395. How
much cash missing?
A. $60
B. $455
C. $395
D. $350
Question # 29
Your business has a petty cash imprest of $750; this is to be increased to $800. At the end of
month the cash in hand was $57 and receipts and vouchers totaled $673. In addition the cash
contained an IOU from a member of staff for $20. How much cash is withdrawn from the bank
restore and increase the imprest?
A. $723
B: $800
C. $743
D. $653
Question # 30
A petty cash purchase is made costing $77.55, Inclusive of VAT at 17,5%. Which of the
following is the correct entry?
A. Dr. Expense $66, Dr. VAT $11.55, Cr. Cash $77.55
B. Dr. Cash $77.55, Cr. VAT $11.55, Cr. Expense $66
C. Dr. Expense $63.98, Dr. VAT 13.57, Cr, Cash $77.5
D. Dr. Cash $77.55, Cr. VAT $13.57, Cr. Expense $63.98
Question # 31
When a petty cash book is kept, there will be:
A. More entries made in the general ledger
B. Fewer entries made in the general ledger
C. The same number of entries made in the general ledger
D .No entries made at all in the general ledger for items paid by the petty cash

Question # 32
A petty cash imprest is in operation with a float of $150 being maintained. There are vouchers
in the box totaling $76 and IOUS totaling $35. There is $29 in the box and $10 travel advance
has been given to one of the directors. How much should be drawn from the bank to top up
the imprest?
A. $110
B. $120
C. $76
D.$121