Imprest account

Definition

An imprest account is a fund used to pay for small, routine expenses and is periodically replenished. It helps maintain control over minor cash transactions.

5 Must Know Facts For Your Next Test

1. The imprest account is typically funded with a fixed amount of cash.
2. Expenses paid from the imprest account must be documented with receipts.
3. When the fund is low, it is replenished back to its original fixed amount.
4. The use of an imprest account minimizes the risk of fraud by limiting access to small amounts of cash.
5. Imprest accounts are often used in conjunction with petty cash funds for better internal control.

Review Questions

Related terms

Petty Cash Fund:

A small amount of discretionary funds used for minor expenditures.

Internal Controls:

Processes and procedures implemented to safeguard assets, ensure financial reporting accuracy, and promote operational efficiency.

Fraud Prevention: Measures taken to detect, prevent, and respond to fraudulent activities within an organization.