Acc 124 2nd Exam 4more Than A Century After Spain Finally Relinquished Her Hold of The Country

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ACC 124 2ND EXAM - 4. More than a century after Spain

finally relinquished her hold of the country,
Conceptual Framework and Intermediate Accounting (University of Mindanao)
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3nd Floor, Dr. Florencio T. Facundo Hall, Business
& Engineering Bldg., Matina, Davao City
Phone No.: (082)300-5456 Local 137
ACC 124 – 2ND EXAMINATION
1. As contemplated in accounting, cash includes

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
2. A compensating balance
A) Must be included in cash and cash equivalent
B) Which is legally restricted and related to a long term loan is classified as current asset
C) Which is legally restricted and related to a short term loan is classified separately as
current asset
D) Which is not legally restricted as to withdrawal is classified separately as current asset
3. 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) Shall be treated as outstanding checks if they are ultimately encashed
4. Which of the following is usually considered cash?

A) Certificates of deposit
B) Checking accounts
C) Money market savings certificates
D) Postdated checks
5. The internal control feature that is specific to petty cash is

A) Separation of duties
B) Assignment of responsibility
C) Proper authorization
D) Imprest system
6. When a petty cash fund is in use, which of the following is true?

A) The balance of the petty cash fund should be reported on the balance sheet as a long
term investment.
B) The petty cashiers summary of petty cash payments serves as a journal entry that is
posted to the appropriate general ledger account
C) The reimbursement of the petty cash fund should be credited to the cash account
D) Entries that include a credit to the cash account should be recorded at the time the
payments from the petty cash fund are made

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Phone No.: (082)300-5456 Local 137
7. The following statement pertain to accounting for petty cash fund. Which statement is
false?
A) Each disbursement from petty cash should be supported by a petty cash voucher
B) The creation of a petty cash fund requires a journal entry to reflect the transfer of fund out
of the general cash account
C) At any time, the sum of the cash in the petty cash fund and the total of petty cash
vouchers should equal the amount for which the imprest petty cash fund was established.
D) With the establishment of an imprest petty cash fund, one person is given the authority
and responsibility for issuing checks to cover minor disbursements.
8. The following statement pertain to the cash short or over account. Which statement is
true?
A) It would be impossible to have cash shortage or overage if employees were paid in cash
rather than by check.
B) The entry to account for daily cash sales for which a small amount of cash shortage
existed would include a debit to cash short or over account.
C) If the cash short or over account has a debit balance at the end of the period it must be
debited to an expense account.
D) A credit balance in a cash short or over account should be considered a liability because
the short changed customer will demand return of this amount.
9. A bank reconciliation is
A) A formal financial statement that lists all of the bank account balances of an enterprise
B) A merger of two banks that previously were competitors
C) A statement sent by the bank to depositor on a monthly basis
D) A schedule that accounts for the differences between an entitys cash balance as shown
on its bank statement and the cash balance shown in its general ledger.
10. If the cash balance shown on entity’s accounting records is less than the correct cash
balance and neither the entity nor the bank has made any errors, there must be
A) Deposits credited by the bank but not yet recorded by the entity
B) Deposits in transit
C) Outstanding checks
D) Bank charges not yet recorded by the entity
11. Which of the following items must be added to the cash balance per ledger in preparing a
bank reconciliation which ends with adjusted cash balance?
A) Note receivable collected by bank in favor of the depositor and credited to the account of
the depositor
B) NSF Check
C) Service charge
D) Erroneous bank debit
12. In preparing a bank reconciliation, interest paid by the bank on the account is
A) Added to the bank balance

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Phone No.: (082)300-5456 Local 137
B) Subtracted from the bank balance

C) Added to the book balance
D) Subtracted from the book balance
13. Which of the following is false?

A) A certified check is a liability of the bank certifying it.
B) A certified check will be accepted by many persons who would not otherwise accept a
personal check
C) A certified check is one drawn by a bank upon itself.
D) A certified check should not be included in the outstanding checks.
14. Which of the following is not a basic characteristic of a system of cash control?
A) Use of a voucher system
B) Combined responsibility for handling and recording cash
C) Daily deposit of all cash received
D) Internal audits at irregular intervals
15. Bank statement provide information about all of the following except
A) Checks cleared during the period
B) NSF Checks
C) Banks charges for the period
D) Error made by the depositor
16. Which will not require an adjusting entry on the depositors books?
A) NSF check from customer
B) Check in payment of account payable amounting to 50,000 is recorded by the depositor
as 5,000
C) Deposit pf another entity is credited to the account of the depositor
D) Bank service charge
17. Tanjiro Company had the following account balances on December 31, 2020:
Cash in bank – current account 4,350,000

Cash in bank – payroll account 890,000
Cash on hand 425,500 (235,500)
Cash in bank – restricted account for building
Construction expected to be disbursed in 2021 2.980,000
Time deposit, purchased December 15, 2020 and
Due March 15, 2021 2,110,000
The cash on hand includes a P190,000 check payable to Tanjiro, dated January 15, 2021.
What should be reported as “cash and cash equivalents” on December 31, 2020?
ANSWER: 7,585,500

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Phone No.: (082)300-5456 Local 137
18. The following data pertain to Loki Company on December 31, 2020:
Checkbook balance 3,500,000

Bank statement balance 5,000,000
Check drawn on Loki’s account,
Payable to supplier, dated and recorded
On Dec. 31, 2020, but not mailed until
Jan. 15, 2021 425,000
Cash in sinking fund 2,150,000
On December 31, 2020, how much should be reported as “cash” under current assets?
ANSWER: 3,925,000
19. Genya Company had the following account on December 31, 2020:
Cash in bank 2,000,000

Cash on hand 115,110
Cash restricted for addition to plant
(expected to be disbursed in 2021) 1,350,600
Cash in bank includes 550,000 of compensating balance against short-term borrowing

arrangement. The compensating balance is not legally restricted as to withdrawal by Genya.
in this December 31, 2020 statement of financial position, what total cash should be reported
under current assets?
ANSWER: 2,115,110
20. On December 31, 2020, Gyoumei Company had the following cash balances:
Cash in bank 1,870,000 (1,330,000)

Petty cash fund (all funds were
Reimbursed on 12/31/2020) 45,500
Time deposit (due Feb. 1, 2021) 265,100
Cash in bank includes 540,000 of compensating balance against short term borrowing
arrangement on December 31, 2020. The compensating balance is legally restricted as to
withdrawal by Gyoumei.
In the December 31, 2020 statement of financial position, what total amount should be
reported as cash and cash equivalents?
ANSWER: 1,640,600

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Phone No.: (082)300-5456 Local 137
21. Muichiro Company had the following account balances on December 31, 2020.
Petty cash fund 45,900 (29,900)

Cash in bank – current account 3,945,000
Cash in bank – sinking fund 2,110,000
Cash on hand 640,000 (545,000)
Cash in bank – restricted account for
Plant addition, expected to be
Disbursed in 2021 1,640,000
Treasury bills 900,000
The petty cash fund includes unreplenished December 2020 petty cash expense vouchers of
P12,000 and employee IOU of P4,000. The cash on hand includes a P95,000 check payable
to Muichiro dated January 15, 2021. In exchange for a guaranteed line of credit, Muichiro
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, 2021.
What should be reported as “cash and cash equivalents” on December 31, 2020?
ANSWER: 7,529,900
22. The cash account in Muzan’s Company ledger showed a balance at December 31, 2020
of P4,411,000 which consisted of the following:
Petty cash fund 24,000

Undeposited receipts, including a postdated
Customer check for P65,000 1,215,000 (1,150,000)
Cash in allied bank, per bank statement, with a
Check for P48,100 still outstanding 2,250,000 (2,201,900)
Bond sinking fund 850,000
Vouchers paid out of collections, not yet recorded 41,000
IOUs signed by employees, taken from collections 31,000
4,411,000
At what amount should cash be reported in the December 31, 2020 statement of financial
position?
ANSWER: 3,375,900
23. In preparing its August 31, 2020 bank reconciliation, Giyu Company has made available
the following information:
Balance per bank statement 1,805,000

Deposit in transit 325,000
Return of customer’s check for insufficient fund 60,000

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Phone No.: (082)300-5456 Local 137
Outstanding checks 275,000

Bank service charge for Giyu 10,000
On August 31, 2020, what is the adjusted cash in bank?
ANSWER: 1,855,000
24. In preparing its bank reconciliation on December 31, 2020, Kanroji Company has made
available the following data:

Amount erroneously credited by bank
To Kanroji’s account 35,600
Bank service charge for December 5,000
What is the adjusted cash in bank on December 31, 2020?
ANSWER: 3,314,400
25. In an audit of Vision Company on December 31, 2020, the following data are gathered:
Balance per book 1,020,000

Bank charges 2,500
Customer note collected by bank 345,500
Interest on customer note 15,000
Customer check returned NSF 60,000
Depositor’s note charged to account 250,000
What is the adjusted cash in bank on December 31, 2020?
ANSWER: 1,068,000
26. Kanroji Company provided the following data for the purpose of reconciling the cash
balance per book with the balance per bank statement on December 31, 2020:

Outstanding checks (including certified check of P100,000) 500,000
December NSF checks (of which P50,000 had been redeposited
And cleared by December 27) 150,000
Erroneous credits to Kanroji’s account representing proceeds

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Phone No.: (082)300-5456 Local 137
Of loan granted to another company 300,000

Proceeds of note collected by bank for Kanroji, net of service
Charge of P20,000 750,000
What is the cash in bank to be reported in the December 31, 2020 statement of financial
position?
ANSWER: 1,500,000
27. The cash account in the ledger of Nezuko Company shows a balance of P1,650,000 at
December 31. The bank statement, however, shows a balance of P2,080,000 at the same
date. The only reconciling items consist of a bank service charge of P2,000, a large number
of outstanding checks totaling P590,000 and a deposit in transit. What is the deposit in
transit in the December 31 bank reconciliation?
ANSWER: 1,648,000
28. BREN Company presented the following bank reconciliation on the month of November:
Balance per bank statement, November 30 3,600,000
Add: Deposit in transit 800,000
4,400,000
Less: Outstanding checks 1,200,000
Bank credit recorded in error 200,000 1,400,000
Balance per book, November 30 3,000,000
Data per bank statement for the month of December follow:
December deposits, including note
Collected if P1, 000,000 for BREN 5,500,000
December disbursements, including NSF customer check
P350, 000 and service charge P50,000 4,400,000
All items that were outstanding checks on November 30, cleared through the bank in
December, including the bank credit.

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Phone No.: (082)300-5456 Local 137
In addition, checks amounting to P500,000 were outstanding and deposits of P700,000 were
in transit on December 31.
What is the amount of cash receipts per book in December?
ANSWER: 4,400,000

Acc 124 2nd Exam 4more Than A Century After Spain Finally Relinquished Her Hold of The Country

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ACC 124 2ND EXAM - 4. More than a century after Spain

Studocu is not sponsored or endorsed by any college or university

College of Accounting Education

ACC 124 – 2ND EXAMINATION

1. As contemplated in accounting, cash includes

4. Which of the following is usually considered cash?

5. The internal control feature that is specific to petty cash is

6. When a petty cash fund is in use, which of the following is true?

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College of Accounting Education

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College of Accounting Education

B) Subtracted from the bank balance

13. Which of the following is false?

Cash in bank – current account 4,350,000

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College of Accounting Education

Checkbook balance 3,500,000

Cash in bank 2,000,000

Cash in bank includes 550,000 of compensating balance against short-term borrowing

Cash in bank 1,870,000 (1,330,000)

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College of Accounting Education

Petty cash fund 45,900 (29,900)

Petty cash fund 24,000

Balance per bank statement 1,805,000

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Outstanding checks 275,000

On August 31, 2020, what is the adjusted cash in bank?

Balance per bank statement 3,500,000

What is the adjusted cash in bank on December 31, 2020?

Balance per book 1,020,000

What is the adjusted cash in bank on December 31, 2020?

Balance per bank statement 2,000,000

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College of Accounting Education

Of loan granted to another company 300,000

Balance per bank statement, November 30 3,600,000

Add: Deposit in transit 800,000

Less: Outstanding checks 1,200,000

Bank credit recorded in error 200,000 1,400,000

Balance per book, November 30 3,000,000

Data per bank statement for the month of December follow:

December deposits, including note

Collected if P1, 000,000 for BREN 5,500,000

December disbursements, including NSF customer check

P350, 000 and service charge P50,000 4,400,000

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What is the amount of cash receipts per book in December?

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