1.

To express an opinion on financial statements, the auditor obtains

reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error. 

Ans: TRUE

2. The cost of installing a new computer system in 2017 was charged to

expense. The computer system is expected to be useful for 5 years. 
Determine the effect on the total assets on December 31, 2017.  

ANS: UNDERSTATED

3. When the auditor decides to select less than 100 percent of the
population for testing, the auditor is said to be using

ANS: AUDIT SAMPLING

4. Which of the following types of auditing is performed most commonly by CPAs? 

ANS: EXTERNAL AUDITING

5. The concept of _________ recognizes that the cost of an entity's

internal control system should not exceed the benefits that are expected to be
derived

ANS: COST BENEFIT RELATIONSHIP

6. Which of the following is classified as a substantive test? 

ANS: Reconcile disbursements per books with checks appearing in the bank
statement. 

7. Independent auditing can best be described as 

ANS: Professional activity that attest to the fair presentation of financial

statement

8. What management's assertion does the auditor address when she/he

reviews the classification of a tract of land acquired for capital appreciation. 

ANS: Presentation and disclosure

9. Each of the three parties involved in an audit _________,________ and

________plays a role that contributes to its success.

ANS: the client, the auditor, and the auditee

10. Professional skepticism requires that the auditor assume that

management is

ANS: dishonest unless proved otherwise

11. Ensuring internal audit teams have the right competencies with right
level of work experience and designing effective internal audit procedures can
reduce the risk of which of the following?

ANS: Audit failures

 12. The primary responsibility for the adequacy of disclosure in the
financial statements of a publicly held company restss with the:

ANS: Management of the company.

13. Fraud can be difficult to detect because it often involves concealment

through falsification of documents or collusion. 

ANS: TRUE

14. What management's assertion does the auditor address when he/she
obtains evidence on the shipping terms of inventories in transit shipped by a
vendor? 

ANS: COMPLETENESS

15. An auditor gathers audit documentation mainly to

ANS: detect fraud and misstatements

16. The risk that the auditor will not detect a material misstatement is
Ans: Audit risk

17. Which of the following pairs of accounts would an auditor most likely
analyze on the same working paper? 

ANS: Notes receivable and interest income.

18. An auditor obtains knowledge about a new client’s business and its
industry to

Ans: understand the events and transactions that may have an effect on client’s
financial statements.

19. The current file of an audit documentation most likely would include
Ans: Analysis of accounts receivable. 

20. Appropriateness is the measure of the quantity of evidence. 

Ans: FALSE

21. When the auditor is an employee of the organization being audited

(auditee), the audit is classified as an _________ quality audit.
ANS: INTERNAL

22. Broadly defined, the subject matter of any audit consist of: 
ANS: Assertions

23. An auditor who accepts an audit but does not possess the industry
expertise of the business entity should
ANS: obtain knowledge of matters that relate to the nature of entity’s business

24. Test of Controls and Substantive test are both required for reasonable
and limited assurance engagements. 
Ans: FALSE

25. Limited assurance engagement aims at reducing risks to a level that is

acceptable in the circumstances but the risk is less than for a reasonable
assurance engagement, as the basis for a negative conclusion. 
ANS: FALSE

MIDTERM

Compilation engagement is an example of an assurance service. 

ANS: FALSE

The concept of _________ recognizes that the cost of an entity's internal control
system should not exceed the benefits that are expected to be derived

ANS: cost-benefit relationship

When the auditor decides to select less than 100 percent of the population for
testing, the auditor is said to be using

ANS: AUDIT SAMPLING

In an assertion-based engagement, the management is responsible for the subject

matter information (the assertion), and may be responsible for the subject matter.

ANS: TRUE

To express an opinion on financial statements, the auditor obtains reasonable

assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error. 

ANS: TRUE

The PSRS are to be applied to non-assurance services such as compilation, audit and
management advisory services. 

ANS: FALSE

Fraud can be difficult to detect because it often involves concealment through

falsification of documents or collusion. 

ANS: TRUE

An auditor obtains knowledge about a new client’s business and its industry to

ANS: understand the events and transactions that may have an effect on client’s
financial statements.

Reliable criteria allow reasonably consistent evaluation or measurement of the

subject matter including, where relevant, presentation and disclosure, when used in
similar circumstances by similarly qualified practitioners. 

ANS: TRUE

The risk that the auditor will not detect a material misstatement is

ANS: AUDIT RISK

Appropriateness is the measure of the quantity of evidence. 

ANS: FALSE

Broadly defined, the subject matter of any audit consists of: 

ANS: ASSERTIONS

When the auditor is an employee of the organization being audited (auditee), the
audit is classified as an _________ quality audit.

ANS: INTERNAL

Each of the three parties involved in an audit _________,________ and ________plays

a role that contributes to its success.

ANS: the client, the auditor, and the auditee

Test of Controls and Substantive test are both required for reasonable and limited
assurance engagements. 

ANS: FALSE

When the auditors express an opinion on financial statements, their

responsibilities extend to:

ANS: Whether the results of their client's operating decisions are fairly presented
in the financial statements.

The primary responsibility for the adequacy of disclosure in the financial

statements of a publicly held company rests with the:

ANS: Management of the company.

Auditor’s Expert is a person who masters accounting and auditing. 

ANS: FALSE

Limited assurance engagement aims at reducing risks to a level that is acceptable

in the circumstances but the risk is less than for a reasonable assurance
engagement, as the basis for a negative conclusion. 

ANS: FALSE

Auditor shall report on the accounts examined by him __________.

ANS: To the shareholders

Problem solving

Jam Company's unadjusted trial balance at December 31, 2018, included the following
accounts: 

Debit Credit
Cash P69,200
Accounts receivable P102,650
Merchandise Inventory P947,160
Accounts payable P789,715
Accrued expenses P13,214
Jam Co.'s year-end is December 31. At the end of 2018, it held its cash book open
so that its statement of financial position would show a more favorable financial
position. Your audit revealed the following items: 
 1. The December cash book included January cash receipts of P65,460, of
which P36,010 represents cash sales and P29,450 represents collections from
customers, net of 5% cash discounts. 
2. The December check register included payments of accounts to suppliers
of P37,240 on which discounts of P1,240 were taken. 
3. The merchandise inventory account balance was determined by physical
count on December 31, 2018. 
What are Jam's working capital and current ratio at December 31, 2018, based on
balances per company books? 

Ans: P316,081; 1.39

The following information pertains to Star Inc.

Sales made during 2012:
Cash 100,000
Credit 320,000
Total 420,000
Accounts receivable classified by age on December 31, 2012:
Age of Accounts Accounts Receivable Balance
Under 30 days P40,000
30-60 days 20,000
61-120 days 10,000
Over 120 days 5,000
Total 75,000
The Allowance for Doubtful Accounts had a P400 credit balance before adjustment on
December 31, 2012.
Upon making an adjusting entry on December 31, 2012 to record the estimated bad
debts, how much shall be debited to bad debt expense under each of the following
cases:
Assuming that the uncollectible rate is 5% of gross accounts receivable.

Ans: P3,350.00

The bookkeeper-cashier of the Tanying Company absconded on the evening of April 16,
2019, apparently with a large portion of the company's cash. He had taken with him
certain accounting records, including the cash journals and the general ledger. You
are called upon to ascertain, if possible, the shortage with which the missing
employee may be charged. 
You obtained the following information from the available subsidiary journals,
ledgers, and other data. 
Balances at close of business, April 16, 2019: 

Accounts receivable P442,550

Accounts payable P207,300
Cash in bank, less checks outstanding P98,830
Transactions, January 1 - April 16, 2019: 

Sales, per receivable clerk P5,876,170

Cash sales none
Sales allowances in customers' accounts P18,330
Cash purchase of furniture, per dealer's invoice P3,000
Total merchandise purchases P3,615,260
Expenses paid, supported by paid invoices and payrolls P1,865,830
Cash dividend declared, P50,000 (of which, P10,000 remains unpaid P40,000
A check for P100,000 had been cashed by the bookkeeper shortly before his
departure. Although the signature on the check had been obviously forged, it was
paid by the bank and returned with other canceled checks. 
A statement of financial position prepared from the books and other files follow: 
Tanying Company
Statement of Financial Position
December 31, 2018

Assets
Cash P32,670
Accounts receivable P226,230
Inventory (at cost) P440,350
Furniture P74,560
Less: Accumulated Depn. (P31,800) P42,760
Total Assets P742,010
Liabilities and Shareholders' Equity
Accounts payable P114,720
Share capital P500,000
Retained earnings P127,290
Tota Liabilities and SHE P742,010
What is the total amount of cash disbursements from January 1 - April 16, 2019? 

ANS: P5,431,510.00

In connection with your audit of the financial statements of Onor Company for the
year ended December 31, 2018, you gathered the following information. 
1. The company maintains its current account with Tsunami Bank. The bank statement
on December 31, 2018 showed a balance of P638,340. 
Your audit of the company's account with Tsunami Bank disclosed the following: 

• A check for P22,500 received from a customer whose account is current

had been deposited and then returned by the bank on December 28, 2018. No entry was
made for the return of this check. The customer replaced the check on January 15,
2019. 
• A check for P5,720 was cleared by the bank as P7,520. The bank made the
correction on January 2, 2019. 
• A check for P3,500 representing payment of an employee advance was
received and deposited on December 27, 2018, but was not recorded until January 3,
2019. 
• Postdated checks totaling P67,300 were included in the deposits in
transit. These represent collections of current accounts receivable from customers.
The checks were actually deposited on January 5, 2019. 
• Various debit memos for drafts purchased for payment of importation of
equipment totaling P230,000 were not yet recorded. These purchases were previously
set up as accounts payable. Said equipment arrived in December 2018. 
• Interest earned on the bank balance for the 4th quarter of 2018,
amounting to P1,950 was not recorded. 
• Bank service charges totaling P1,260 were not recorded. 
• Deposit in transit and outstanding checks at December 31, 2018 totaled
P136,250 and P276,380, respectively. 
2. Various expenses from the company's imprest petty cash fund dated December 2018,
totaled P16,250 while those dated January 2019, amounted to P5,903. Another
disbursement from the fund dated December 2018 was a cash advance to an employee
amounting to P3,500. A replenishment of the petty cash fund was made on January 8,
2019. 

3. The company's trial balance on December 31, 2018, includes the following
accounts: 

Cash in bank - Tsunami Bank P748,320

Cash in bank - Earthquake Bank (restricted account for plant expansion, expected to
be disbursed in 2019) P700,000
Petty cash fund P30,000
Time deposit, placed December 20, 2018, and due March 20, 2019 P1,000,000
Money market placement - Prudential Bank P4,000,000
The December 31, 2018, statement of financial position should show "Cash and Cash
Equivalents at

ANS: P5,442,960

Your audit of the December 31, 2018, financial statements of Dionisio Corp. reveals
the following: 

Current account at Prime Bank P(30,000)

Current account at Prudent Bank P135,000
Treasury bills (acquired 3 months before maturity) P300,000
Treasury bills (maturity date is December 31, 2019) P1,500,000
Payroll account P390,000
Foreign bank account - restricted (translated using the December 31, 2018, exchange
rate) P2,000,000
Postage stamps P1,250
Employee's postdated checks P4,500
IOU from the vice president P8,000
Credit memo from a supplier for a purchase return P8,100
Traveler's check P21,000
Money order P12,900
Petty cash fund (P3,000 in currency and expense receipts for P12,000) P15,000
What amount would be reported as "cash and cash equivalents" in the statement of
financial position on December 31, 2018? 

ANS: P861,900.00

The bookkeeper-cashier of the Tanying Company absconded on the evening of April 16,
2019, apparently with a large portion of the company's cash. He had taken with him
certain accounting records, including the cash journals and the general ledger. You
are called upon to ascertain, if possible, the shortage with which the missing
employee may be charged. 
You obtained the following information from the available subsidiary journals,
ledgers, and other data. 
Balances at close of business, April 16, 2019: 

Accounts receivable P442,550

Accounts payable P207,300
Cash in bank, less checks outstanding P98,830
Transactions, January 1 - April 16, 2019: 

Sales, per receivable clerk P5,876,170

Cash sales none
Sales allowances in customers' accounts P18,330
Cash purchase of furniture, per dealer's invoice P3,000
Total merchandise purchases P3,615,260
Expenses paid, supported by paid invoices and payrolls P1,865,830
Cash dividend declared, P50,000 (of which, P10,000 remains unpaid P40,000
A check for P100,000 had been cashed by the bookkeeper shortly before his
departure. Although the signature on the check had been obviously forged, it was
paid by the bank and returned with other canceled checks. 

A statement of financial position prepared from the books and other files follow: 
Tanying Company
Statement of Financial Position
December 31, 2018

Assets
Cash P32,670
Accounts receivable P226,230
Inventory (at cost) P440,350
Furniture P74,560
Less: Accumulated Depn. (P31,800) P42,760
Total Assets P742,010
Liabilities and Shareholders' Equity
Accounts payable P114,720
Share capital P500,000
Retained earnings P127,290
Tota Liabilities and SHE P742,010
What is the total amount paid for merchandise purchases? 

ANS! P3,522,680.00

In your cash audit of Pagong Company as of December 31, 2020, you gather the
following:
Balance per books P1,000.00
Balance per bank 1,000.00
Bank charges 2.50
Outstanding checks 237.50
Deposit in transit 312.50
Customer’s note collected by the bank 375.50
Interest on customer’s note 15.00
Customer’s check returned NSF 62.50
Depositor’s note charged to account 250.00
 
The correct cash balance amounts to:

ANS: P1,075.00

The following amounts are shown on the 2018 and 2017 financial statements of San
Francisco Co.: 

2018 2017
Accounts Receivable ? P470,000
Allowance for credit loss P20,000 P10,000
Net sales P2,600,000 P2,400,000
Cost of goods sold P1,900,000 P1,752,000
San Francisco Co.'s accounts receivable turnover for 2018 is 6.5 times. 

What is the accounts receivable balance at December 31, 2018? 

ANS: P360,000.00

Jam Company's unadjusted trial balance at December 31, 2018, included the following
accounts: 

Debit Credit
Cash P69,200
Accounts receivable P102,650
Merchandise Inventory P947,160
Accounts payable P789,715
Accrued expenses P13,214
Jam Co.'s year-end is December 31. At the end of 2018, it held its cash book open
so that its statement of financial position would show a more favorable financial
position. Your audit revealed the following items: 

1. The December cash book included January cash receipts of P65,460, of

which P36,010 represents cash sales and P29,450 represents collections from
customers, net of 5% cash discounts. 
2. The December check register included payments of accounts to suppliers
of P37,240 on which discounts of P1,240 were taken. 
3. The merchandise inventory account balance was determined by physical
count on December 31, 2018. 
What are Jam's correct working capital and current ratio at December 31, 2018? 

ANS: P280,381; 1.33

In connection with your examination of the financial statements of John Inc. for
the year ended December 31, 2016, you were able to obtain certain information
during your audit of the Accounts Receivable and related accounts.
The December 31, 2016, balance in the Accounts Receivable control account is
558,600
An aging schedule of the account receivable as of December 31, 2016 is presented
below:
Age Net Debit Balance % to be applied after corrections have been made
60 days under 258,513 1%
61 to 90 days 204,735 3%
91 to 120 days 59,886 6%
Over 120 days 35,466 Definitely uncollectible, 6,300; the remainder is
estimated to be 25% uncollectible
558,600
C. The only entries made in the Bad Debt Expense account were:
A debit on December 31 for the credit to the Allowance for Bad Debts
A credit for 4,110 on November 30, 2016, and a debit to Allowance for Bad Debts
because of bankruptcy. The related sale took place on October 1, 2016.
D. The Allowance for Bad Debts schedule is presented below:
Debit Credit Balance
January 1, 2016 13,125
November 30, 2016 4,110 9,015
December 31, 2016 (558,600x5%) 27,930 36,945
E. There is a credit balance in one account receivable (61 to 90 days) of 7,260. It
represents an advance on a sales contract
What is the balance of Accounts Receivable as of December 31, 2016?

ANS: P555,450.00

The auditor of Tsikoy Company gathered the following information: 

1. The November 30 bank statement balance included bank service charges of
P2,000. 
2. The November 30 cash balance in the general ledger was P244,500
3. Outstanding checks on November 30 were P63,000 while undeposited
receipts were P36,000. 
4. The bank service charges as shown on the bank statement totaled
P3,000. 
5. The December 31 cash balance in the general ledger was P319,750, which
recognized P482,750 for December receipts and P405,500 for checks written during
December. In transit to the bank were receipts of P28,750. Checks of P15,000
written prior to December and checks of P60,500 written in December had not yet
cleared the bank.
What is the bank balance on December 31? 

ANS: P366,500

Your audit assistant prepared the following bank reconciliation for a client:
September 2020
Balance, Aug. 31 Receipts Disbursements Balance, Sept. 30
Per bank statement P110,530 P660,660 P653,230 P1117,960
Deposit in Transit
Aug. 31 2,050 (2,050)
Sept. 30 3,220 3,220
Outstanding Checks
Aug. 31 (2,140) (2,140)
Sept. 30 1,030 (1,030)
Customer’s Check returned by bank, Sept. 29 (110) 110
Per books P110,440 P661,830 P652,010 P120,260
The adjusted balance of cash in bank, September 30 is:

ANS: P120,150

The following facts apply to Oto Company during 2018: 

1. Savings account of P900,000 and a checking account balance of

P1,200,000 are held at Manila Bank. 
2. Money market placement with maturity of 3 months, P7,500,000. 
3. Currency and coins on hand amounted to P11,550. 
4. Travel advances of P270,000 for the first quarter of next year
(employee reimbursement will be through salary deduction). 
5. Oto Company has purchased P3,150,000 of commercial paper of Mendez
Corp. which is due in 60 days. 
6. A separate cash fund amounting to P2,250,000 is restricted for the
retirement of long-term debt. 
7. Petty cash fund of P1,500. 
8. An IOU from an employee of Oto Company in the amount of P2,000. 
9. Two certificates of deposit, each totaling P500,000. These CDs have a
maturity of 120 days. 
10. Oto Company has received a check from a customer in the amount of
P187,500 dated January 15, 2019. 
11. On January 1, 2018, Oto Company purchased marketable equity securities
to be held as "trading" for P3,000,000. On December 31, 2018, its market value is
P4,300,000. 
What amount should be reported as cash and cash equivalents on December 31, 2018? 

P12,763,050.00

Following information to the Cash in Bank account of Mango Company for the month of
April, 2012:
i. Balances per bank statement March 31, P21,560, and April 30, P23,040.
ii. Balances of Cash in Bank account in Company’s books: March 31, P16,545, and
April 30, P22,680
iii. Total receipts per books were P222,190 of which P1,210 was paid in cash to a
creditor on April 16.
iv. Total charges in the bank statement during April were P218,970.
v. Undeposited receipts were: March 31, P9,060 and April 30, P10,120.
vi. Outstanding checks were: March 31, P2,675 and April 30, P1,930, of which a
check for P500 was certified by the bank on April 22.
vii. NSF checks returned, recorded as reductions of cash receipts, were:
Returned by Bank in April, recorded also in April, P1,040
Returned by Bank in April but recorded in May, P860
viii. Collections by Bank not recorded by company were P12,150 in March, and
P11,640 in April.
ix. Bank service charges not entered in company’s books were: March 31, P750 and
April 30 P420.
x. A check for P950 of Marang Company was charged to Mango Company in error.
xi. A check drawn for P840 was erroneously entered in the books as P480.
Compute for the adjusted bank balance of cash on April 30.

ANS: P32,680.00

In connection with your examination of the financial statements of John Inc. for
the year ended December 31, 2016, you were able to obtain certain information
during your audit of the Accounts Receivable and related accounts.
The December 31, 2016, balance in the Accounts Receivable control account is
558,600
An aging schedule of the account receivable as of December 31, 2016 is presented
below:
Age Net Debit Balance % to be applied after corrections have been made
60 days under 258,513 1%
61 to 90 days 204,735 3%
91 to 120 days 59,886 6%
Over 120 days 35,466 Definitely uncollectible, 6,300; the remainder is
estimated to be 25% uncollectible
558,600
C. The only entries made in the Bad Debt Expense account were:
A debit on December 31 for the credit to the Allowance for Bad Debts
A credit for 4,110 on November 30, 2016, and a debit to Allowance for Bad Debts
because of bankruptcy. The related sale took place on October 1, 2016.
D. The Allowance for Bad Debts schedule is presented below:
Debit Credit Balance
January 1, 2016 13,125
November 30, 2016 4,110 9,015
December 31, 2016 (558,600x5%) 27,930 36,945
E. There is a credit balance in one account receivable (61 to 90 days) of 7,260. It
represents an advance on a sales contract
How much is the adjusted balance of Allowance for Bad Debts as of December 31,
2016?

ANS: P19,583.00

Following information to the Cash in Bank account of Mango Company for the month of
April, 2012:
i. Balances per bank statement March 31, P21,560, and April 30, P23,040.
ii. Balances of Cash in Bank account in Company’s books: March 31, P16,545, and
April 30, P22,680
iii. Total receipts per books were P222,190 of which P1,210 was paid in cash to a
creditor on April 16.
iv. Total charges in the bank statement during April were P218,970.
v. Undeposited receipts were: March 31, P9,060 and April 30, P10,120.
vi. Outstanding checks were: March 31, P2,675 and April 30, P1,930, of which a
check for P500 was certified by the bank on April 22.
vii. NSF checks returned, recorded as reductions of cash receipts, were:
Returned by Bank in April, recorded also in April, P1,040
Returned by Bank in April but recorded in May, P860
viii. Collections by Bank not recorded by company were P12,150 in March, and
P11,640 in April.
ix. Bank service charges not entered in company’s books were: March 31, P750 and
April 30 P420.
x. A check for P950 of Marang Company was charged to Mango Company in error.
xi. A check drawn for P840 was erroneously entered in the books as P480.
Compute for the adjusted bank balance on March 31.

ANS: P27,945.00

In connection with your audit of the financial statements of Onor Company for the
year ended December 31, 2018, you gathered the following information. 
1. The company maintains its current account with Tsunami Bank. The bank statement
on December 31, 2018 showed a balance of P638,340. 
Your audit of the company's account with Tsunami Bank disclosed the following: 

• A check for P22,500 received from a customer whose account is current

had been deposited and then returned by the bank on December 28, 2018. No entry was
made for the return of this check. The customer replaced the check on January 15,
2019. 
• A check for P5,720 was cleared by the bank as P7,520. The bank made the
correction on January 2, 2019. 
• A check for P3,500 representing payment of an employee advance was
received and deposited on December 27, 2018, but was not recorded until January 3,
2019. 
• Postdated checks totaling P67,300 were included in the deposits in
transit. These represent collections of current accounts receivable from customers.
The checks were actually deposited on January 5, 2019. 
• Various debit memos for drafts purchased for payment of importation of
equipment totaling P230,000 were not yet recorded. These purchases were previously
set up as accounts payable. Said equipment arrived in December 2018. 
• Interest earned on the bank balance for the 4th quarter of 2018,
amounting to P1,950 was not recorded. 
• Bank service charges totaling P1,260 were not recorded. 
• Deposit in transit and outstanding checks at December 31, 2018 totaled
P136,250 and P276,380, respectively. 
2. Various expenses from the company's imprest petty cash fund dated December 2018,
totaled P16,250 while those dated January 2019, amounted to P5,903. Another
disbursement from the fund dated December 2018 was a cash advance to an employee
amounting to P3,500. A replenishment of the petty cash fund was made on January 8,
2019. 

3. The company's trial balance on December 31, 2018, includes the following
accounts: 

Cash in bank - Tsunami Bank P748,320

Cash in bank - Earthquake Bank (restricted account for plant expansion, expected to
be disbursed in 2019) P700,000
Petty cash fund P30,000
Time deposit, placed December 20, 2018, and due March 20, 2019 P1,000,000
Money market placement - Prudential Bank P4,000,000
What is the adjusted petty cash fund on December 31, 2018? 

ANS: P10,250

The following information is from Gumamela Corp.'s first year of operations: 

1. Merchandise purchased P450,000

2. Ending merchandise inventory P123,000
3. Collections from customers P150,000
All sales are on account and goods sell at 30% above cost. 

What is the accounts receivable balance at the end of the company's first year of
operations? 

ANS: P275,100.00

The cash account of Dolly, Inc., disclosed a balance of P17,056.48 on October 31.
The bank statement as of October 31 showed a balance of P21,209.45. Upon comparing
the statement with the cash records, the following facts were developed.
Dolly’s account was charged on October 26 for a customer’s uncollectible check
amounting to P1,143.
A 2-month, 9%, P3,000 customer’s note dated August 25, discounted on October 12,
was dishonored October 26 and the bank charged Dolly P3,050.83, which included a
protest fee of P5.83.
A customer’s check for P725 was entered as P625 by both the depositor and the bank
but was later corrected by the bank.
Check No. 661 for P1,242.50 was entered in the cash disbursements journal at
P1,224.50 and check No. 652 for P32.90 was entered as P329.00. The company uses the
voucher system.
Bank service charges of P39.43 for October were not yet recorded on the books.
A bank memo stated that M. Sin’s note for P2,500 and interest of P62.50 had been
collected on October 29, and the bank charged 12.50 (No entry was made on the books
when the note was sent to the bank for collection).
Receipts of October 29 for P6,850 were deposited November 1.
The following checks were outstanding on October 31:
No. 620 P1,250.00 No. 671 P732.50
No. 621 3,448.23 No. 673 187.90
No. 632 2,405.25 No. 675 275.72
No. 670 1,775.38 No. 676 2,233.15
The bank reconciliation as of October 31 will show an adjusted cash balance of:

ANS: P15,751.32

The auditor of Tsikoy Company gathered the following information: 

1. The November 30 bank statement balance included bank service charges of
P2,000. 
2. The November 30 cash balance in the general ledger was P244,500
3. Outstanding checks on November 30 were P63,000 while undeposited
receipts were P36,000. 
4. The bank service charges as shown on the bank statement totaled
P3,000. 
5. The December 31 cash balance in the general ledger was P319,750, which
recognized P482,750 for December receipts and P405,500 for checks written during
December. In transit to the bank were receipts of P28,750. Checks of P15,000
written prior to December and checks of P60,500 written in December had not yet
cleared the bank.
What is the total book disbursements for December? 

ANS: P407,500