HOLY TRINITY COLLEGE OF GENERAL SANTOS CITY

COLLEGE OF BUSINESS MANAGEMENT & ACCOUNTANCY

APPLIED AUDITING QUIZ 2- SET B

General Instruction: Write your name on the

top of the test paper. Use only ballpen in Problem 2
writing your answer.
Consider the following data as of December 31,
I. Problem-Solving. Write your final answer on 2017:
the space provided after each question.
Strictly NO ERASURES. Answers with a) Total book credits in December,
erasures will be invalid. (3-0 point system) P500,000
b) November service charge taken in
December, P1,000
c) December service charge taken up in
Problem 1 January 2018, P1,500
d) November outstanding checks, P10,500
You obtained the following information on the e) December outstanding checks, P5,000
current account of Sinayang Company during
your examination of its financial statements for Solve for the bank debits.
the year ended December 31, 2017.

The bank statement on November 30, 2017

showed a balance of P306,000. Among the bank Problem 3
credits in November was customer’s note for
P100,000 collected for the account of the You were engaged to audit the accounts of
company which the company recognized in Pinabayaan Corporation for the year ended
December among its receipts. Included in the December 31, 2017. In your examination, you
bank debits were cost of checkbooks amounting determined that the Cash account represents
to P1,200 and a P40,000 check which was both cash on hand and cash in bank. You
charged by the bank in error against Sinayang further noted that the company’s internal
Co. account. Also in November you ascertained control over cash is very poor. You started the
that there were deposits in transit amounting to audit on January 15, 2007. Based on your cash
P80,000 and outstanding checks totaling count on this date, cash on hand amounted to
P170,000. The bank statement for the month of P19,200.
December showed total credits of P416,000 and
total charges of P204,000. The company’s books Examination of the cash book and other
for December showed total debits of P735,600, evidence of transactions disclosed
total credits of P407,200 and a balance of the following:
P485,600.
a) January collections per duplicate
Bank debit memos for December were: No. 121 receipts, P75,200.
for service charges, P1,600 and No. 122 on a b) Total duplicate deposit slips, all dated
customer’s returned check marked “Refer to January, P44,000. This amount
Drawer” for P24,000. On December 31, 2017 the includes a deposit
company placed with the bank a customer’s representing collections on December
promissory note with a face value of P120,000 31.
for collection. The company treated this note as c) Cash book balance at December 31,
part of its receipts although the 2017 amounted to P186,000,
bank was able to collect on the note only in representing both cash on hand and
January, 2007. A check for P3,960 was recorded cash in bank.
in the company cash payments books in d) Bank statement for December showed a
December as P39,600. balance of P170,400.
e) Outstanding checks at December 31:
QUESTIONS:
November checks December checks
Based on the application of the necessary audit No.280 P1,800 No.331 P2,400
procedures and appreciation of the above data, 290 6,600 339 1,600
you are to provide the answers to the following: 345 20,000
353 3,600
1. How much is the undeposited collections as of 364 10,000
December 31, 2017?
f) Undeposited collections at December 31,
2. How much is the adjusted cash balance as of 2017 amounted to P20,000.
November 30, 2017? g) An amount of P4,400 representing
proceeds of a clean draft on a customer
3. How much is the adjusted bank receipts for was credited by
December? bank, but is not yet taken up in the
company’s books.
4. How much is the adjusted book h) Bank service charges for December,
disbursements for December? P400.

5. How much is the adjusted cash balance as of The company cashier presented to you the
December 31, 2017? following reconciliation statement for December,
2017, which he has prepared:

APPLIED AUDITING QUIZ 2-SET B Page 1 of 2

 HOLY TRINITY COLLEGE OF GENERAL SANTOS CITY
COLLEGE OF BUSINESS MANAGEMENT & ACCOUNTANCY
APPLIED AUDITING QUIZ 2- SET B

C. Simultaneous bank
Balance per books, December 31, 2017 P180,600 reconciliations
Add outstanding checks: D. Simultaneous surprise cash
No. 331 P2,400 count
339 1,600 2. When counting cash on hand, the
345 2,000 auditor must exercise control over all
353 3,600 cash and other negotiable assets to
364 1,000 10,600 prevent
Total 191,200 A. Theft
Bank service charge (400) B. Substitution
Undeposited collections (20,400) C. Irregular endorsement
Balance per bank, December 31, 2017 P170,400 D. Deposits-in-transit

QUESTIONS: 3. In testing controls over cash

disbursements, an auditor most likely
Based on the above and the result of your audit, would determine that the person who
answer the following: signs checks also:
A. Reviews the monthly bank
reconciliation.
1. How much is the adjusted cash balance as of
B. Returns the checks to accounts
December 31, 2017?
payable.
C. Is denied access to the
2. How much is the cash shortage as of supporting documents.
December 31, 2017? D. Is responsible for mailing the
checks.

Problem 4 4. Sound internal control dictates that,

immediately upon receiving checks from
Nawalan ng Pag-asa Inc., had the following bank customers by mail, a responsible
reconciliation at June 30, 2018: employee should:
A. Add the checks to the daily
Balance per book, June 30, 2018 P100,000 cash summary.
Add: Note collected by bank 25,000 B. Verify that each check is
Outstanding checks 2,500 supported by a prenumbered
Less: Bank service charge 2,000 sales invoice.
Deposit in transit 12,000 C. Prepare a duplicate listing of
Balance per bank, June 30, 2018 P113,500 checks received.
D. Record the checks in the cash
Data per bank , June 30, 2018 follow: receipts journal.

Deposits (including P10,000 note collected by 5. Which of the following sets of

bank)-P115,000 information does an auditor usually
Disbursements (including P3,000 bank service confirm on one form?
charge July)-P88,000 A. Accounts payable and purchase
commitments.
All reconciliation items at June 30,2018, cleared B. Cash in bank and collateral for
the bank and taken up in the books in July. loans.
Outstanding checks at July 31, 2018, C. Inventory on consignment and
amounted to P7,500 and there were P15,100 contingent liabilities.
deposits in transit on the same date. D. Accounts receivable and
accrued interest receivable.
QUESTIONS:

1. Determine the cash balance per book at July

31, 2018?

2. Determine the adjusted cash balance on July “ GOD BLESS AND DON’T FORGET TO
31, 2018? SMILE” 

II. Multiple Choice. Encircle the letter of your

answer. (1 point each)

1. A cash shortage may be concealed by

transporting funds from one location to
another or by converting negotiable
assets to cash. Because of this, which of
the following is vital?
A. Simultaneous confirmations
B. Simultaneous verifications

APPLIED AUDITING QUIZ 2-SET B Page 2 of 2