1. As contemplated in accounting, cash includes
a. Money only
b. Money and negotiable instruments
c. Money and any negotiable instrument that is payable in money and
acceptable by the bank for deposit and immediate credit
d. None of the above
2. Which of the following is not a cash equivalent?
a. Money market placements
c. Treasury bills
b. Demand Deposit
d. None of the above
3. Cash equivalents are
a. Short-term and highly liquid investments that are readily convertible
into cash
b. Short-term and highly liquid investments that are readily convertible
into cash with remaining maturity of three months
c. Short-term and highly liquid investments that are readily convertible
into cash and acquired three months before maturity
d. None of the above
4. To be reported as “cash and cash equivalent”, the cash and cash equivalent
must be
a. Unrestricted in use for current operations
b. Available for the purchase of property, plant and equipment
c. Set aside for the liquidation of long-term debt
d. None of the above
5. Unreleased checks (checks drawn before the end of reporting period but held
for later delivery to creditors)
a. Shall be treated as outstanding checks
b. Shall be restored to the cash balance
c. Shall be treated as outstanding checks if the date is shortly after the
end of reporting period.
d. None of the above
6. Bank overdraft
a. Is a debit balance in a cash in bank account
b. Is offset against demand deposit account in another bank
c. Which cannot be offset is classified as a current liability
d. Which cannot be offset is classified as non-current liability
7. Which of the following is usually considered cash?
a. Certificates of deposit
b. Checking accounts
c. Money market saving certificate
d. None of the above
8. Which of the following shall not be considered “cash” for financial
reporting purposes?
a. Petty cash funds and change funds
b. Money orders, certified checks and personal checks
c. Coin, currency and available funds
d. Postdated checks and IOUs
9. The petty cash account under the imprest fund
a. Only when the fund is created
b. When the fund is created and every time it
c. When the fund is created and when the size
d. When the fund is created and when the size
system is debited
is replenished
of the fund is increased
of the fund is decreased
10. Petty cash fund is
a. Separately classified as current asset
b. Money kept on hand for making minor disbursements of coin and currency
rather than by writing checks
c. Set aside for the payment of payroll
d. None of the above
11. Kennison Company has cash in bank of $10,000, restricted cash in a separate
account of $3,000, and a bank overdraft in an account at another bank of
$1,000. Kennison should report cash of
a. $9,000.
b. $10,000.
c. $12,000.
d. None of the above
12. Consider the following: Cash in Bank – checking account of $13,500, Cash on
hand of $500, Post-dated checks received totaling $3,500, and Certificates
of deposit totaling $124,000. How much should be reported as cash in the
balance sheet?
a. $ 13,500.
b. $ 14,000.
c. $ 131,500.
d. None of the above
13. Everlast Company reported the following information at the current yearend:
• Investment securities of P1,000,000. These securities are share
investments in entities that are traded in Philippine Stock Exchange. As a
result, the shares are very actively traded in the market.
• Investment securities of P2,000,000. These securities are government
treasury bills. The treasury bills have a 10-year term and purchased on
December 31 at which time they had 100 days to until they mature.
• Cash of P3,400,000 in the form of coin, currency, savings account and
checking account.
• Investment securities of P1,500,000. These securities are commercial
papers. The term of the papers is nine months and they were purchased on
December 31 at which time they had three months to go until they mature.
How much should be reported as cash in the balance sheet?
a. 4,900,000
b. 6,900,000
c. 7,900,000
d. None of the above
14. Medina Corporation had the following account balances on December 31, 2014.
Cash in Bank – current account
P5,000,000
Cash in Bank – payroll account
P1,000,000
Cash on hand
P500,000
Cash in bank – restricted account for building construction expected
to be disbursed in 2015
P3,000,000
The cash on hand included a P200,000 check payable to Mexico dated
1/15/2015. What total amount should be reported as “cash and cash
equivalents” on December 31, 2014?
a. 6,300,000
b. 6,500,000
c. 9,300,000
d. None of the above
15. Campbell Company had the following account balance of December 31, 2013.
Petty cash fund 50,000
Cash in bank – current account 4,000,000
Cash in bank – sinking fund 2,000,000
Cash on hand 500,000
Cash in bank – restricted account for plant addition,
Expected to be disbursed in 2014 1,500,000
Treasury bills 1,000,000
The petty cash fund included unreplenished December 2013 petty cash expense
vouchers of P10,000 and employee IOU of P5,000. The cash on hand included a
P100,000 check payable to Campbell dated January 15, 2014. In exchange for
a guaranteed line of credit, the entity has agreed to maintain a minimum
balance of P200,000 in its unrestricted current bank account. The sinking
fund is set aside to settle a bond payable that is due on June 30 2015.
What total amount should be reported as cash and cash equivalents” on
December 31, 2013?
a. 7,435,000
b. 5,435,000
c. 5,535,000
d. None of the above
16. On December 31, 2013, the cash account of Roel Company showed the following
details:
Undeposited collections 60,000
Cash in bank – PCIB checking account 500,000
Cash in bank – PCIB (overdraft) (50,000)
Undeposited NSF check received from customer,
dated December 1, 2013 15,000
Undeposited check from a customer, dated January 15, 2014 25,000
Cash in bank – PCIB (fund for payroll) 150,000
Cash in bank – PCIB (saving deposit) 100,000
Cash in bank – PCIB (money market instrument, 90 days) 2,000,000
Cash in foreign bank (restricted) 100,000
IOUs from officers 30,000
Sinking fund cash 450,000
Financial asset held for trading 120,000
On
a.
b.
c.
d.
December 31, 2013, what total amount should be reported as
2,810,000
2,770,000
810,000
None of the above
17. At year-end, Myca Company reported cash and cash equivalents comprising
cash on hand P500,000, demand deposit P4,000,000, certificate of deposit
P2,000,000, postdated customer’s check P500,000, petty cash fund P50,000,
traveler’s check P200,000, manager’s check P100,000 and money order
P150,000.
What total amount of cash and cash equivalent should be reported at yearend?
a. 5,000,000
b. 5,500,000
c. 7,000,000
d. None of the above
18. Finster Company was providing the following information at the end of
the year comprising its cash account:
Cash in bank
1,000,000
Cash on Hand
500,000
Cash in sinking fund
300,000
Vouchers paid out of collections, not yet recorded
100,000
What total cash must be reported in the financial statement?
a. 1,900,000
b. 1,800,000
c. 1,500,000
d. None of the above
19. Ral Company reported that the checkbook balance on December 31, 2013
was P5,000,000. In addition, the entity held the following items in its
safe on that date:
Check payable to Ral, dated January 2, 2014 in
payment of a sale made in December 2013,
included in December 31 checkbook balance
Check payable to Ral, deposited December 15
2,000,000
and included in December 31 checkbook
balance, but returned by bank on December 30
stamped “NSF.” The check was redeposited on
January 2, 2014 and cleared on January 9, 2014
500,000
Check drawn on Ral’s account, payable to a vendor, dated
and recorded in Ral’s books on December 31, 2013
but not mailed until January 10, 2014
300,000
What total amount of cash and cash equivalent should be reported?
a. 4,800,000
b. 4,500,000
c. 2,800,000
d. None of the above
20-25. In the course of your audit of the Las Piñas Corporation, its
controller is attempting to determine the amount of cash to be reported on
its December 31, 2010 statement of financial position.
The following information is provided:
1. Commercial savings account of P1,200,000 and a commercial
checking account balance of P1,800,000 are held at PS Bank.
2. Travel advances of P360,000 for executive travel for the first quarter
of the next year (employee to reimburse through salary deduction).
3. A separate cash fund in the amount of P3,000,000 is restricted for the
retirement of a long-term debt.
4. Petty cash fund of P10,000.
5. An I.O.U. from a company officer in the amount of P40,000.
6. A bank overdraft of P250,000 has occurred at one of the banks the
company uses to deposit its cash receipts. At the present time, the
company has deposits at this bank.
7. The company has two certificates of deposit, each totaling P1,000,000.
These certificates of deposit have maturity of 120 days.
8. Las Piñas has received a check dated January 2, 2011 in the amount of
P150,000.
9. Las Piñas has agreed to maintain a cash balance of P200,000 at all times
at PS Bank to ensure future credit availability.
10. Currency and coin on hand amounted to P15,000.
20. How much will be reported as cash and cash equivalents at December 31,
2010?
a. 3,025,000
b. 2,825,000
c. 2,575,000
d. None of the above
21. Cash fund for retirement of a long term debt is classified as:
a. Cash and cash equivalent
b. Noncurrent liabilities
c. Noncurrent assets
d. None of the above
22. I.O.U from a company officer is classified as:
a. Cash and cash equivalents
b. Trade and other receivables
c. Noncurrent asset
d. None of the above
23. Bank overdraft of 250,000 is presented under:
a. Cash and cash equivalent
b. Current liabilities
c. Noncurrent liabilities
d. None of the above
24. Certificate of deposit of 1,000,000 is classified as:
a. Cash and cash equivalent
b. Short term investment
c. Long term investment
d. None of the above
25. Compensating balance of 200,000 is classified as:
a. Cash and cash equivalent
b. Short term investment
c. Long term investment
d. None of the above
26-30: In connection with your audit of Caloocan Corporation
the year ended December 31, 2010, you gathered the following:
for
Current account at Metrobank P2,000,000
Current account at BPI (100,000)
Payroll account 500,000 Foreign bank account – restricted (in equivalent
pesos) 1,000,000
Postage stamps 1,000
Employee’s postdated check 4,000
IOU from controller’s sister 10,000
Credit memo from a vendor for a purchase return 20,000
Traveler’s check 50,000
Not-sufficient-funds check 15,000
Money order 30,000
Petty cash fund (P4,000 in currency and expense receipts for P6,000)
10,000
Treasury bills, due 3/30/11 (purchased 12/29/10) 200,000
Treasury bills, due 1/31/11 (purchased 2/1/10) 300,000
26. Compute for the cash and cash equivalents that will be reported on
December 31, 2010 statement of financial position?
a. 2,784,000
b. 3,084,000
c. 2,790,000
d. 2,704,000
27. Current account at BPI amounting to (100,000) is classified as:
a. Cash and Cash equivalents
b. Short Term Borrowings
c. Short Term Investment
d. None of the above
28. Employee’s Post-Dated Check is classified as:
a. Cash and Cash equivalents
b. Trade and Other Receivables
c. Current Investments
d. None of the above
29. Expense receipts for P6,000 are classified as:
a. Cash and Cash Equivalents
b. Operating Expenses
c. Other financial assets
d. None of the above
30. Treasury bills, due 1/31/11 (purchased 2/1/10) is classified as:
a. Cash and cash equivalents
b. Short Term Investments
c. Other non-current assets
d. None of the above
Bonus Questions:
1. Full Name of your instructor:
2. Instructor’s job Title in Scrubbed