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Cash & cash equivalent

Multiple Choice
Identify the choice that best completes the statement or answers the question.

____ 1. The term cash includes

a. coins, currency (paper money), checks
b. money orders, and money on deposit that is available for unrestricted withdrawal
c. short-term receivables
d. both a and b

____ 2. A cash short and over account is

a. not generally accepted.
b. debited when the petty cash fund proves out over
c. debited when the petty cash fund proves out short
d. a contra account to cash

____ 3. The amount reported as “Cash” on a company’s statement of financial position

normally should exclude
a. petty cash fund
b. post-dated checks issued by the company
c. post-dated checks payable to the company
d. undelivered checks to the payee written and signed by the company

____ 4. A Petty cash system is designed to

a. cash checks for employees
b. handle cash sales
c. account for small cash receipts and disbursements
d. pay small miscellaneous expenses

____ 5. A good internal control system provides procedures for

a. making payments from the day’s collections.
b. allowing one person to receive cash & to record cash receipts.
c. preparing regular bank reconciliation
d. delaying the deposit of cash collections because no one knows for sure the account
to be credited
____ 6. Which one of the following would not cause a bank to debit a company's account?
a. Bank service charge
b. Collection of a note receivable
c. Checks marked NSF
d. Wiring of funds to other locations

____ 7. The debit balance in Cash Short and Over at the end of an accounting period is
reported as
a. an expense on the income statement
b. income on the income statement
c. an asset on the balance sheet
d. a liability on the balance sheet

____ 8. Credit memos from the bank

a. decrease a bank customer's account
b. are used to show a bank service charge
c. show that a company has deposited a customer's NSF check
d. show the bank has collected a note receivable for the customer

____ 9. Journal entries based on the bank reconciliation are required in the company's
accounts for
a. outstanding checks
b. deposits in transit
c. bank errors
d. book errors

____ 10. The cash account in the company's ledger is a(n)

a. asset with a debit balance
b. asset with a credit balance
c. liability with a debit balance
d. liability with a credit balance

____ 11. Travel advances should be reported as

a. Supplies
b. cash because they represents the equivalent of money.
c. investments
d. prepaid expense

____ 12. Which of the following should not be considered cash by an accountant?
a. money orders
b. bank checking accounts
c. postage stamps
d. travelers' checks

____ 13. Which of the following is considered cash

a. 30-day certificate of deposit
b. customer’s postdated checks
c. money market checking accounts
d. 6 month money market savings certificates

____ 14. The amount of deposits in transit is included on the bank reconciliation as a(n)
a. deduction from the balance per the company's books
b. deduction from the balance per bank statement
c. addition to the balance per bank statement
d. addition to the balance per company books

____ 15. What entry is required in the company's accounts to record outstanding checks?
a. debit Accounts Receivable; credit Cash
b. debit Cash; credit Accounts Receivable
c. debit Cash; credit Accounts Payable
d. none


The following bank reconciliation is presented for Peter Company the Month of November, 2015:

Balance per bank statements, 11/30 P 60,000

Add: deposit in transit 13,000
Total 73,000
Less: Outstanding checks P 20,000
Bank credit recorded in error 3,000 23,000
Balance per books. 11/30 50,000

Date per bank statement for the month of December, 2015 follow:

December deposits, Including note for P16,000

Collected in behalf of Peter Company P 91000
December disbursement (including NSF for P11,000,
& service charges of P500) 73,000

All items that were outstanding as of November 30 cleared through the bank in December, including
the bank credit. In addition, P8,000 in checks were outstanding and deposits of P11,000 were in
transits as of December 31, 2015.

16. Unadjusted cash balance per ledger at December 31, 2015?

17. Correct cash balance at December 31, 2015?

18. Cash disbursement per books during December?

19. Cash receipts per books during December?

The statement of financial position of Troy Company shows cash of P165,410. The following items
were found to comprise this total amount:

Balance per bank, (outstanding checks as of year-end totaled P7,600) 52,600

Savings account at east west bank 15,400
Petty cash fund (including expense receipts for P125) 750
Cash on hand (Undeposited sales receipts) 2,100
Sinking fund cash 17,500
Customer’s check on hand:
Traveller’s check 7,000
Manager’s check 11,560
Short-term treasury bills 26,000

20. What is the correct amount of cash?

21. How much is the non-current assets?

Jhanine Company is preparing its March 31 bank reconciliation. The following data are available:

Per bank Per book

a. March data:
Balance, February 28 740,000 719,000
March deposits reflected 476,000 490,000
March check reflected (617,000)* (610,000)
Notes collected (including
P2,000 interest) 202,000
Service charge (1,200)
Balance, March 31 800,800 599,000

b. From the February 28 bank reconciliation:

Deposit in transit, P18,000
Outstanding checks, P40,000
* Erroneously includes a check drawn by Jhanine for P15,000.

22. The deposit in transit at March 31?

23. What is the amount of outstanding checks at March 31?

The following bank reconciliation is presented for the Mischa Co. for the month of November 2015:

Balance per bank statement, 11/30/15 P 180,400

Add: Deposit in transit P 41,500
Erroneous bank charge 15,000 56,500
Subtotal 236,900
Less: Outstanding checks 78.200
Balance per book, 11/31/15 P 158,700

Data for the month of December 2015 follow:

Per bank: December deposit / credits P 261,000
December charges / debits 224,200
Balance, December 31, 2015 217,200

All items that were outstanding as of November 30 cleared to the through the bank in December,
including the bank charge. In addition, P25,000 in checks were outstanding as of December 31,

24. What is the amount of cash receipts per books in December 31, 2015?

25. What is the cash balance per book at December 31, 2015?

26. What is the amount of cash disbursement per books in December 2015?

Using the following information:

The information that follows is available from the general ledger and the bank statement
of Losser Company.

a. Bank statement balance, June 30, P800,000; July 31, P950,000.

b. Cash in bank, June 30, P853,000; July 31, P939,000.

c. Deposit in transit, June 30, P100,000; July 31, P35,000.

d. Outstanding checks, June 30, P60,000; July 31, P68,000.

e. Credit memo, June 30, P25,000; July 31, P60,000.

f. Debit memo, June 30, P18,000; July 31, P20,000.

g. Bank receipts, P1,050,000; Bank Disbursement, P900,000.

h. Book receipts, P964,000; Book Disbursement, P878,000.

i. Included in the July bank receipts was a memo adjustment for an erroneous bank charge
made against Losser Company’s account during June P20,000.

j. A deposit of Losser for P25,000 on July was erroneously recorded by the bank to Losserious
Company account.

k. Included in the July bank disbursement was a check issued by Lossious Company for
P10,000, erroneously recorded by the bank in Losser Company’s account.

i. Included in the book receipt was a deposit for P45,000 which was recorded as P54,000. No
correction was made yet by Losser Company.

m. Included in the book disbursement was a check issued by Losser Company for P42,000
was recorded as P24,000.

27. The correct bank receipt for the month of July is

28. The correct book disbursement for the month of July is

29. Adjusted cash in bank balance as of June 30, 2015 is

30. The adjusted bank balance as of July 31, 2015 is

Jasmin Company’s checkbook balance at December 31, 2015 was P100,000. In addition, Jasmin
held the following items in its safe that date.

Check payable to Jasmin, dated December 31, 2015 in payment of a sale made in December 2015
not included in December 31, checkbook balance P20,000.

Check payable to Jasmin, deposited December 15 but returned by bank on December 30 Marked
“NSF” the deposit and the return were both reflected in the checkbook P5,000.

Check drawn on Jasmin Company’s account, payable to a vendor, dated December 30, but no yet
mailed to payee as of December 31, 2015. The check is not yet recorded P3,000.
31. The amount to be shown as Cash on Jasmin’s statement of financial position at
December 31, 2015?

In your cash count of the petty cash fund of J & L Company as of January 4, 2016, you found the
following items in the petty cash box.

Bills & coins counted 2,900

Approved and signed petty cash vouchers
Dated December 2015 6,600
Dated January 1-4, 2016 1,600
IOU from Jed, an employee 2,800
A check drawn by Lovely, an employee
dated January 15, 2016 4,000
An Unsigned pay enveloped, payable to
an employee on leave, the envelop has
been opened and there was no money
inside, indicated in the envelope is the
amount of 3,000

The petty cash fund has an imprest balance of P20,000.

32. The amount of cash shortage or overage?

33. The amount of petty fund that will be included in the cash balance at December 31,