THE EFFECT OF IMPREST SYSTEM ON CASH MANAGEMENT


THE EFFECT OF IMPREST SYSTEM ON CASH MANAGEMENT

CHAPTER ONE

1.1   THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Background of the Study

The petty cash impress system is an accounting system that provides for the replenishing of money spent on petty expenses in the organization. The impress system provides that a specified amount of money be provided to meet petty expenses in the office at a specified period of time referred to as the float. The expenses so incurred are recorded in the petty cash record. At the end of the specified period, an amount is an issue to cover the expenses so incurred to bring the balance back to the original amount. The replenishment is credited to the primary cash account, usually, a bank account (Dr - Petty Cash a/c, Cr - Bank a/c) and the debits will go to the respective expense accounts, based on the petty cash receipt dockets (Dr - Expense a/c, Cr - Petty Cash a/c). The amount requested for the replenishment of the impress is documented in the petty cash dockets and their associated receipts or invoices. The documentation facilitates the records of the expenses to be checked against the float to know what is left as balance; WEB EXPENSE (2016). The research, therefore, seeks to investigate the effect of the Impress system on cash management. 

 1.2   THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Statement of the Problem

The petty cash impress system is an accounting system that provides for the replenishing of money spent on petty expenses in the organization. The impress system provides that a specified amount of money be provided to meet petty expenses in the office at a specified period of time referred to as the float. The expenses so incurred are recorded in the petty cash record. At the end of the specified period, an amount is an issue to cover the expenses so incurred to bring the balance back to the original amount. The replenishment is credited to the primary cash account, usually, a bank account (Dr - Petty Cash a/c, Cr - Bank a/c) and the debits will go to the respective expense accounts, based on the petty cash receipt dockets (Dr - Expense a/c, Cr - Petty Cash a/c). The amount requested for the replenishment of the impress is documented in the petty cash dockets and their associated receipts or invoices. The documentation facilitates the records of the expenses to be checked against the float to know what is left as balance.

The impress system of cash management has not been given greater consideration in the accounting process of cash management in many organizations due to the nature of the purpose for which the cash is provided for. Just as the name implies proper checks and balances are not conducted before the expenses are replenished to continue with the next to impress period. Therefore, much organization suffers huge losses from the impress system for sources considered insignificant in the accounting process of the organization.

Much of petty cash funds have been diverted for personal uses and unaccounted for thereby increasing the organizational cost. The principal reason is that in many organizations petty cash accounting is not included in the main accounting policy framework of the organization as a result when other accounting records are checked and scrutinized the petty cash records are not included in the scheme. Consequently, the neglect of management in overseeing the impress system has constituted a major reason for the regular mismanagement and fraud in the impress system of cash management. However, with modern technology advocates for the application of the digital process to enhance a policy-based implementation of the impress system has been made. Therefore, the problem confronting the research is to determine the effect of the Impress system on cash management.

1.2      THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Objectives of the Study

To find out the effect of the impress system on cash management. To determine how effective the impress system is. To find out the challenges of the impress system.

1.3      THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Research Questions

i. What is the effect of the Impress system on cash management?

ii. How effective is the impress system?

iii. What are the challenges of the impress system?

1.4      THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Significance of the Study

The study proffers the need for an enlarged accounting policy framework that will cover the presentation of accurate accounting records and cash management for the impressive system. The impress system of cash management has not been given greater consideration in the accounting process of cash management in many organizations due to the nature of the purpose for which the cash is provided for. Just as the name implies proper checks and balances are not conducted before the expenses are replenished to continue with the next to impress period. Therefore many organization suffer huge losses from the impress system

1.5      THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Research Hypothesis

Ho: The effect of impress system on cash management is not effective

Hi: The effect of the impress system on cash management is effective

1.6      THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Scope of the Study

The study focuses on the appraisal of The effect of impress system on cash management

1.7      THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Limitations of the Study

The study was confronted by some constraints including logistic and geographical factors.

1.8      THE EFFECT OF IMPRESS SYSTEM ON CASH MANAGEMENT: Definition of Terms

IMPRESS SYSTEM DEFINED

The petty cash impress system is an accounting system that provides for the replenishing of money spent on petty expenses in the organization. The impress system provides that a specified amount of money be provided to meet petty expenses in the office at a specified period of time referred to as the float. The expenses so incurred are recorded in the petty cash record. At the end of the specified period, an amount is an issue to cover the expenses so incurred to bring the balance back to the original amount. The replenishment is credited to the primary cash account, usually, a bank account (Dr - Petty Cash a/c, Cr - Bank a/c), and the debits will go to the respective expense accounts.

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THE EFFECT OF IMPREST SYSTEM ON CASH MANAGEMENT



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