Professional Documents
Culture Documents
PRESIDENT UNIVERSITY
PART 1.
A. MULTIPLE CHOICE
On your answer sheet please write the letter of the correct answer.
Be sure you WRITE LETTERS ONLY after each number.
a. Money only.
b. Money and any negotiable instrument.
c. Any negotiable instrument
d. Money and any negotiable instrument that is payable in money and acceptable
by the bank for deposit and immediate credit.
a. Short-tem and highly liquid investments that are readily convertible into cash.
b. Short-tem and highly liquid investments that are readily convertible into cash
with remaining maturity of three months.
c. Short-tem and highly liquid investments that are readily convertible into cash
and acquired three months before.
d. Short-tem and highly liquid marketable equity securities.
5. If the end of the reporting period is December 31, 2008, which of the following cannot
qualify as cash equivalent?
8. Bank overdraft
9. A compensating balance
10. Which means "that the check has been drawn and recorded but not given to the payee
at the end of the reporting period"?
a. Undelivered check
b. Post-dated check delivered
c. Stale check
d. Outstanding check
B. On your answer sheet write afer each number the LETTER which best
described the following:
d. Required if the accounting treatment differs from that previously accorded item.
e. A basic feature that would be unreasonable to use in reporting on a firm that had become
insolvent.
f. None of these.
h. A measurement that can be corroborated by qualified accountants using the same method.
i. Discourage undue optimism in measuring and reporting net assets and net earnings.
j. Requires separation of personal from business activity in the recording and reporting
process.
PART 2.
PROBLEM SOLVING :
SHOW ALL YOUR COMPUTATIONS IN GOOD FORM
P1. Everlast company reported the following information as of the end of the current year:
● Cash of $3,400,000 in the form of coin, currency, savings account, and checking account.
Required:
How much should be reported as cash and cash equivalents at the end of the current year?
Solution:
2,000,000
3,400,000
5,400,000
P2. On December 31, 2008, Everbest Company's "cash account" balance per ledger of $3,600,000
includes the following:
b. Check of $50,000 dated January 31, 2009 in payment of accounts payable was recorded
and mailed December 31, 2008.
c. The company uses the calendar year. The cash receipts journal was held open until
January 15, 2009 during which time, $200,000 was collected and recorded on December
31, 2008.
Required:
b. Cash 50,000
Accounts payable 50,000
P3. From the books and records of Miramax Company as of December 31, 2012, you gathered
the following:
Required:
1. Compute for the correct cash balance per book as of December 31, 2012.
Balance per book 1,000,000
Bank charges (3,000)
Customer note collected by bank 375,000
Interest on customer note 15,000
Customer check returned NSF (62,000)
Depositor's note charged to account (250,000)
1,075,000
2. Prepare journal entries to correct the cash balance.
1 Bank charges 3,000
Cash 3,000
2 Cash 390,000
Notes Payable 375,000
Interest income 15,000
P4. The following amounts were taken from the unadjusted trial balance of Tank Company on
December 31, 2016:
The accounts receivable balance includes customers' deposit of $200,000. The market value of the
trading securities is $700,000. The balance of the notes receivable includes $700,000 of note
discounted for which the company is contingently liable.
Required: 30 minutes