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CASH -TIP

1. Puma Company has a following cash balance at the end of the year

Cash in bank 1,000,000
Cash on hand 1,500,000
Petty cash fund 500,000
Sinking Fund 2,000,000
Money Order 1,000,000
Managers Check 900,000
Certificate of deposit maturity of 3 mos. 10,000,000
Treasury bill with a maturity of 6mos 10,000,000
Post dated Check 1,000,000
Savings Deposit 1,000,000
Voucher paid out of collection not recorded 2,000,000
IOUs signed by employees 5,000,000

What amount should be reported as Cash on December 31, 2014?
a. 10,000,000
b. 9,900,000
c. 9,500,000
d. 9,000,000

2. PHINEAS AND FERB Company shows the following account balances in their financial records as of December 31,2014
Checking account at BPI P(20,000)
Checking account at Land Bank 500,000
Payroll account- National Bank 100,000
Foreign bank account-restricted 750,000
Postage stamps 22,000
Employees postdated checks 30,000
I.O.U from presidents brother 75,000
Travelers check 50,000
NSF check 18,000
Petty cash fund (16,000 in currency & expenses receipts for 84,000) 100,000
Cashiers check 36,000

What is the correct cash balance to be reported in the statement of financial position of Phineas and Ferb Company of December 31, 2014?
a. 582,000
b. 686,000
c. 702,000
d. 704,000

3. On January 1, 2014, financial statement of Pantene Company reveals the ff:
Current account at China Bank-prime P (45,000)
Current account at BPI Bank-prudent 175,000
Treasury bills (acquired 4 months before maturity) 350,000
Treasury bills (maturity date is Jan. 1, 2014) 1,650,000
Payroll account 400, 000
Foreign bank account-restricted (translated using the 1,000,000
Jan. 1, 2014, exchange rate)
Postage stamps 1,350
Employees post-dated check 5,000
IOU from the president 7,500
Credit memo from a supplier for a purchase return 7,100
Travelers Check 22,000
Money Order 12,900
Petty cash fund (p5, 000 in a currency and expense receipt
For p13, 000) 12,000

What amount would be reported as cash and cash equivalents in the statement of financial position on January 1, 2014?
a.P1, 000, 000
b.P786, 987
c.P964, 900
d.P543, 908


4. Alfie companys checkbook balance bat December 31,2014 was P180,000. In addition, Alfie held the following items in its safe on that date.
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Check payable to Alfie dated January 2, 2015 in payment of a sale made in December 2014, included in December 31 checkbook balance.
P65,000
Check payable to Alfie deposited December 15, but returned by the bank on December 30 stamped DAIF.
P20,000
Check drawn on Alfies account, payable to a vendor, dated and recorded on December but not yet mailed to payee as of December 31, 2014.
P15,000

What is the amount shown as cash on Alfies December 31,2014 statement of financial position.
a. P110, 000 c.P280, 000
b. P100, 000 d. P240, 000

5. On January 1, 2014, St. John Corporation established a petty cash fund of P400. On December 31, 2014, the petty cash fund was examined and found to have
receipts and documents for miscellaneous expenses amounting to P364. In addition, there was cash amounting to P44. What entry would be required to record
replenishment of the petty cash fund on December 31, 2014?
a. Petty Cash 364
Cash short over 8
Cash 356
c. Miscellaneous expense 364
Cash short over 8
Cash 356
b. Miscellaneous expense 364
Cash and short over 8
Petty Cash 356
d. Miscellaneous expense 356
Cash short and over 8
Cash 364

6. A company has a petty cash fund of 25. At the end of the month, petty cash includes the following:

Currency and coins .................................... 1.50
Receipted vouchers for:
Postage ............................................... 6.00
Travel ................................................ 7.50
Donation to charity ................................... 10.00
25.00

Which of the following is the correct entry to simultaneously reimburse the fund and increase it to 100?
a. Petty Cash..................... 100.00
Cash ........................ 100.00
b. Petty Cash..................... 98.50
Cash ........................ 98.50
c. Postage........................ 6.00
Travel......................... 7.50
Donations...................... 10.00
Cash......................... 23.50
d. Petty Cash..................... 75.00
Postage........................ 6.00
Travel......................... 7.50
Donations...................... 10.00
Cash......................... 98.50

7. On April 1, 2014, Mark Company established an imprest petty cash fund for P10,000 by writing a check drawn against its checking account. On April 30, 2014, the
fund contained the following:

Currency and coins 3,000
Receipts for office supplies 4,000
Receipts for postage still unused 3,000
Receipts for transportation 800

On April 30, 2014, the entity wrote a check to replenish the fund. What is the amount of replenishment under the imprest fund system?
a. 8,200
b. 6,600
c. 7,000
d. 3,000

8. The accountant of Mark, Inc. examined the petty cash fund immediately after the close of business, January 31, 2014, the end of the companys natural business
year. The petty cash custodian presented the following during the count:

Currency P2,450
Petty cash vouchers:
Postage 350
Office Supplies Exp. 1,000
Transportation Exp. 560
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Computer repairs 700
Advances to office staff 1,700
A check drawn by Mark, Inc., payable to-
The petty cash custodian 6,840
Postage stamps 450
An employees check, returned by bank, marked NSF 2,000
An enveloped containing currency of p 3,780 for a gift-
For a retiring employee 3,780
P19,830

How much is the petty cash shortage or overage?
a.P4, 230
b.P5, 987
c.P6, 987
d.P6, 897

9. Jerome Corporation keeps all its cash in a checking account. An examination of the companys accounting records and bank statement for the month ended June
30,2014 revealed the following information:

a. The cash balance per book on June 30 is P850,000
b. A deposit o P100,000 that was placed in the banks night depository on June 30 does not appear on the bank statement.
c. The bank statement shows on June 30, the bank collected note for Jerome and credited the proceeds of P95,000 to the companys account.
d. Checks outstanding on June 30 amount to P30,000
e. Jerome discovered that a check written in June for P20,000 in payment of an account payable, had been recorded in the companys record as 2,000
f. Included with the June bank statement was NSF check for P25,000 that Jerome had received from a customer on June 26.
g. The bank statement shows a P2,000 service on June 30,2014

The adjusted cash balance is
a. 900,000 c. 936,000
b. 830,000 d. 918,000

10. Mark Company provided the following data for the purpose of reconciling the cash balance per book with the balance per bank statement on December 31, 2014:
Balance per bank statement 2,000,000
Balance per book 850,000
Outstanding checks (including certified check of P100,000) 500,000
Deposit in transit 200,000
December NSF checks (of which P50,000 had been re-deposited and cleared by December 27)
150,000
Erroneous credit to Marks account, representing proceeds of loan granted to another company
300,000
Proceeds of note collected by bank for Mark, net of service charge of P20,000
750,000

The cash in bank balance to be shown on Marks December 31, 2014 balance sheet is
a. 1,500,000 c. 1,400,000
b. 1,800,000 d. 1,450,000

11. On March 3, 2014, Jerome Company received its bank statement. However, the closing balance of the account was unreadable. Attempts to contact the bank after
hours did not secure the desired information. Thus, you had to prepare a bank reconciliation from the available information summarized below:
February 28 book balance 1,460,000
Note collected by bank 100,000
Interest earned on note 10,000
NSF check of customer 130,000
Bank service charge on NSF check 2,000
Other bank service charges 3,000
Outstanding checks 202,000
Deposit of February 28 placed in night depository 85,000
Check issued by Joshtin Company charged to Jeromes account 20,000
What was the cash balance per bank statement?
a. 1,435,000
b. 1,532,000
c. 1,338,000
d. 1,557,000

12. The following information pertains to Teresa Company as of December 31, 2014:
Cash balance per bank statement 4,000,000
Checks outstanding (including certified check of P100,000) 500,000
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Bank service charge shown in December bank statement 20,000
Error made by Teresa in recording a check that cleared the bank December (check was drawn in
December for P100,000 but recorded at P10,000)


90,000
Deposit in transit 1,300,000
What is the cash balance per ledger on December 31, 2014?
a. 4,900,000
b. 5,010,000
c. 4,910,000
d. 4,830,000

13. Teresa Company had the following bank reconciliation on June 30, 2014:

Balance per bank statement, June 30
3,000,000
Add: Deposit in transit 400,000
Total 3,400,000
Less: Outstanding checks 900,000
Balance per book, June 30 2,500,000
The bank statement for the month of July showed the following:
Deposits (including P200,000 note collected for Teresa) P9,000,00
Disbursement (including P140,000 NSF check and
P10,000 service charge) 7,000,000

All reconciling items on June 30 cleared through the bank in July. The outstanding checks totaled P600,000 and the deposit i n transit amounted to P1,000,000 on
July 31.

Q1. What is the cash balance per book on July 31, 2014?
a. 5,400,000
b. 5,350,000
c. 5,550,000
d. 4,500,000

Q2. What is the amount of cash receipts per book in July 2014?
a. 9,400,000
b. 9,600,000
c. 8,600,000
d. 9,800,000

Q3. What is the amount of cash disbursements per book in July 2014?
a. 6,550,000
b. 6,700,000
c. 7,300,000
d. 6,850,000

14. Coney Island Company provided the following information with respect to its cash and cash equivalents on December 31, 2014
Checking account at First Bank (200,000)
Checking account at Second Bank 3,500,000
Treasury savings bonds 1,000,000
Payroll account 500,000
Value added tax account 400,000
Foreign bank account restricted (in equivalent pesos) 2,000,000
Postage stamps 50,000
Employees postdated check 300,000
IOU from presidents brother 750,000
Credit memo from a vendor for a purchase return 80,000
Travelers checks 300,000
Not-sufficient-fund check 150,000
Petty cash fund (P20,000 in currency and expense receipts for P30,000)
50,000
Money order 180,000

What amount would be reported as unrestricted cash on the balance sheet?
a. 5,900,000
b. 4,600,000
c. 4,900,000
d. 6,900,000

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15. The cash account of Academe Company showed a balance of P6,500,000. The bank statement did not include a deposit of P230,000 made on the last day of the
month. The bank statement showed a collection by the bank of P34,000 and a customers check for P62,000 returned because it was NSF.
A customers check for P35,000 was recorded on the books asP74,000.and a check written for P79,000 was recorded as P97,000. What is the correct balance in the
cash account?
a. 6,500,000
b. 6,486,000
c. 6,539,000
d. 6,662,000

16. Green Company had the following cash balances at December 31, 2014 Green Company had the following cash balances at December 31,2014:

Undeposited coins and currency 35,000
Unrestricted demand deposits 1,450,000
Company checks written (and deducted
from the demand deposits amount) but
not scheduled to be delivered until January 6, 2015 180,000
Time deposits restricted for use (expected use in 2015) 3,000,000

In exchange for a guaranteed line of credit, Green has agreed to maintain a minimum balance of 150,000 in its unrestricted demand deposits account. How much
should Green report as cash in its December 31,2014 balance
a. 1,665,000
b. 1,515,000
c. 1,520,000
d. 1,335,000

17. The following information is shown in the accounting records of a company:

Balances as of January 1, 2014
Cash P93,000
Merchandise inventory 129,000
Accounts Receivable 100,500
Accounts payable 79,500
Balances as of December 31, 2014
Merchandise Inventory P117,000
Accounts receivable 136,500
Accounts payable 72,000

Total sales and cost of goods sold for 2014 were P1,197,000 and P874,500, respectively. All sales and all merchandise purchases were made on credit. Various
operating expenses of P160,500 were paid in cash. Assume that there were no other pertinent transactions. The cash balance on December 31, 2014 would be
a. 162,500
b. 223,500
c. 384,000
d. 457,500

18. The controller of the Red Wing Corporation is in the process of preparing the companys 2014 financial statements. Shes trying to determine the correct balance of
cash and cash equivalents to be reported as current asset in the statement of financial position. The following items are being considered:

Balances in the companys accounts at First National Bank; checking P13,500, savings P22,100
Undeposited customer checks of P5,200
Currency and coins on hand P580
Savings account at East Bay Bank with a balance of P400,000. This account is being used to accumulate cash for future plant expansion (2016)
P20,000 in checking account at East Bay Bank. The balance in the account represent a 20% compensating balance for a P100,000 loan with the bank.
Red Wing may not withdraw the funds until the loan is due in (2016)
Treasury bills; 2-month maturity bills totaling P15,000(purchased 2-months before maturity), and 7-month bills totaling P20,000.

Q1. What is the correct balance of cash?
a. P41,380
b. P36,180
c. P441,380
d. P436,180

Q2. What is the correct amount for cash equivalents?
a. P35,000
b. P15,000
c. P20,000
d. P0

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Q3. What is the total amount of cash and cash equivalents to be reported in the current asset section of the 2014 statement of financial position?
a. P56,380
b. P76,380
c. P476,380
d. P456,380

Q4. What would be the classification for the P400,000 savings account at East Bay Bank?
a. Current Asset, as cash
b. Noncurrent Asset, as long-term investment
c. Current Asset, as temporary investments
d. None of the choices given

Q5. What is the classification for the P20,000 7-month treasury bills?
a. Current Asset, as cash
b. Noncurrent Asset, as long-term investment
c. Current Asset, as temporary investments
d. None of the choices given

19. Burr Company had the following account balances at December 31, year 2:
Cash in banks 2,250,000 Cash on hand 125,000 Cash legally restricted for additions to plant (expected to be disbursed in year 3) 1,600,000 Cash in banks includes
600,000 of compensating balances against short-term borrowing arrangements. The compensating balances are not legally restricted as to withdrawal by Burr. In the
current assets section of Burrs December 31, year 2 balance sheet, total cash should be reported at
a. 1,775,000
b. 2,250,000
c. 2,375,000
d. 3,975,000

20. On October 31, year 2, Dingo, Inc. had cash accounts at three different banks. One account balance is segregated solely for a November 15, year 2 payment into a
bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance.
How should these accounts be reported in Dingos October 31, year 2 classified balance sheet?
a. The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported
as a current liability.
b. The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability.
c. The segregated account should be reported as a noncurrent asset, and the regular account should be reported as a current asset net of the overdraft.
d. The segregated and regular accounts should be reported as current assets net of the overdraft.

21. Poe, Inc. had the following bank reconciliation at March 31, year 2:
Balance per bank statement, 3/31/Y2 46,500 Add deposit in transit 10,300 56,800 Less outstanding checks 12,600 Balance per books, 3/31/Y2 44,200 Data per
bank for the month of April year 2 follow:
Deposits 58,400 Disbursements 49,700 All reconciling items at March 31, year 2, cleared the bank in April. Outstanding checks at April 30, year 2, totaled 7,000.
There were no deposits in transit at April 30, year 2. What is the cash balance per books at April 30, year 2?
a. 48,200
b. 52,900
c. 55,200
d. 58,500

22. On December 31, 2014, Invoker Company received its bank statement. A bank reconciliation is prepared from the following available information:

Book Balance 1,650,000
Receivable collected by the bank 500,000
Interest earned on note 50,000
Outstanding Check 202,000
Check issued by Kael Company charged to Invoker Company 10,000

What amount should be reported in the cash balance per bank statement?
a. 2,200,000
b. 1,988,000
c. 2, 150, 00
d. 1,650,000

23. At June 30, Almond Co.'s cash balance was 10,012 before adjustments, while its ending bank statement balance was 10,772. Check number 101 was issued June
2 in the amount of 95, but was erroneously recorded in Almond's general ledger balance as 59. The check was correctly listed in the bank statement at 95. The
bank statement also included a credit memo for interest earned in the amount of 35, and a debit memo for monthly service charges in the amount of 50.
What was Almond's adjusted cash balance at June 30?
a. 9,598
b. 9,961
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c. 10,048
d. 10,462

24. On December 31, 2014, Konch Company has the following accounts at Liberty First Bank, all of which it classifies as cash or cash equivalents.
Account Total
Checking Account 100,000
Certificate of Deposit 10,000
Money Market Account 10,000
In addition, Konch has a second checking account at Liberty First bank with an overdrawn balance of 5,000 on the same date.
Which of the following statements about the amount that Konch should report as cash and cash equivalent on its December 31, 2014 balance sheet is most
accurate?
a. Konch should report 120,000 as cash and cash equivalents on the balance sheet.
b. Konch should report 115,000 as cash and cash equivalents on the balance sheet.
c. Konch should report 120,000 as cash and cash equivalents and 5,000 as a current liability.
d. None of the above

25. Darna Company had the following account balances on December 31, 2014:

Petty cash fund 50,000
Cash in bank-current account 4,000,000
Cash in bank-sinking fund 2,000,000
Cash on hand 500,000
Cash in bank-restricted account for plant addition
expected to be disbursed in 2015 1,000,000
Treasury bills 1,500,000

The petty cash fund included unreplenished December 2014 petty cash expense vouchers of P10,000 and employee IOU of P5,000. The cash on hand included a
P100,000 check payable to Darna dated January 15,2015. In exchange for a guaranteed line of credit, the entity 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, 2015. What is the total amount to be
reported as cash and cash equivalents on December 31, 2014?
a. 7,435,000
b. 5,435,000
c. 4,435,000
d. 5,535,000

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