Which of the following statements correctly describes an imprest system?
A. An imprest system is an internal control procedure relating to cash receipts.
B. There is no difference between a petty cash fund and an imprest bank account.
C. If the transfers from the payroll account to the employees’ checking accounts occur without error, the imprest payroll bank account will equal zero after all employees have been paid.
D. The use of an imprest system eliminates the need for bank reconciliations.
Answer:C
Which of the following statements correctly describes an imprest system?
A. An imprest system is an internal control procedure relating to cash receipts. B. There is no difference between a petty cash fund and an imprest bank account. C. If the transfers from the payroll account to the employees’ checking accounts occur without error, the imprest payroll bank account will equal zero after all employees have been paid. D. The use of an imprest system eliminates the need for bank reconciliations.