INTACC REVIEWER d.

Temporary Investments serving as

collateral for outstanding loans.
o Which of the following is not considered cash o Under which section of the statement of
for financial reporting purposes? financial position is “cash restricted for plant
a. Coin, currency, and available funds expansion” reported?
b. Petty cash funds and change funds a. Non- current assets
c. Money orders, certified checks and b. Current Liabilities
personal checks c. Current Assets
d. Posted checks and I.O.U’s d. Equity
o Which of the following is considered cash? o A cash equivalent is a short- term, highly liquid
a. Certificates of deposits (CDs) investment that is readily convertible into
b. Money Orders known amounts of cash and
c. Posted Checks a. Bears an interest rate that is at least
d. Money market savings certificates equal to the prime rate of interest at
o Travel advances should be reported as ( the date of liquidation
Answer: as receivables) b. is so near its maturity that it presents
a. None of these insignificant risk of changes in interest
b. Investments cash because they rates
represent the equivalent of moneys c. Is acceptable as a means to pay current
c. Investments liabilities.
d. Cash payback d. has a current market value that is
o Which of the following items should not be greater than its original cost
included in the Cash caption on the statement o Bank overdrafts generally should be
of financial position a. netted against cash and a net cash
a. Postage stamps on hand
amount reported
b. Coins and currency in the cash register
c. Amounts on deposit in checking account b. reported as a deduction from the
at the bank current asset section
d. Checks from the parties presently in the
c. reported as a deduction from cash
cash register
o All of the following may be included under the d. reported as a current liability

heading of “cash” except o Deposits held as compensating balances

a. Checking account balance a. none of these
b. Money market funds b. if legally restricted and held against
c. Saving account balance short term credit may be included as
d. Currency cash
o In which account are post-dated checks c. if legally restricted and held against
received classified? long term credit may be included
a. Prepaid expenses among current assets
b. Receivables d. usually do not earn interest
c. Cash o Which of the following is an appropriate
d. Payable reconciling item to the balance per bank in
o In which account are postage stamps classified? bank reconciliation?
a. Receivables – does not amount a. Bank interest
receivables from debtor b. Deposit in transit
b. Cash - not a cash c. Chargeback for NSF check
c. Inventory – not a stock of inventory d. Bank service charge
which company deals o A Cash Over and Short account
d. Office supplies a. is debited when the petty cash
o What is compensating balance? fund proves out over
a. Saving accounts balances b. is debited when the petty cash
b. Minimum deposits required to be fund proves out short
maintained in connection with a c. is not generally accepted
borrowing arrangement d. is a contra account to Cash
c. Margin accounts held with brokers o Which of the following is not true
 a. Entries are made to the Petty Cash o KEYT Company has cash in bank of $10,000,
account only to increase or restricted cash in a separate account of $3,000,
decrease the size of the fund or to and a bank overdraft in an account at another
adjust the balance if not bank of $1,000. KEYT should report cash of
replenished at year-end a. $12,000
b. The imprest petty cash system in b. $9,000
effect adheres to the rule of c. $13,000
disbursement by check d. $10,000
c. The Petty Cash account is debited o IAN Company has the following items at year-
when the fund is replenished end:
d. All of these are not true
o The journal entries for a bank reconciliation Cash in bank $20,000
a. may include a debit to Accounts Petty cash 300
Payable for an NSF check
b. are taken from the "balance per Commercial paper with maturity of 2 months
bank" section only 5,500
c. may include a debit to Office
Postdated checks 1,400
Expense for bank service charges
d. may include a credit to Accounts IAN should report cash and cash equivalents of
Receivable for an NSF check
a. $20,300
o When preparing bank reconciliation, bank
b. $25,800
credits are
c. $20,000
a. Added to the balance per books.
d. $27,200
b. Added to the bank statement
o R-ZEL Company has cash in bank of $15,000,
balance.
restricted cash in a separate account of $4,000,
c. Deducted from the bank
and a bank overdraft in an account at another
statement balance.
bank of $2,000. R-ZEL should report cash of
d. Deducted from the balance per
a. $13,000
books.
b. $19,000
o Consider the following: Cash in Bank - checking
c. $15,000
account of $13,500, Cash on hand of $500,
d. $18,000
Post-dated checks received totaling $3,500, and
o SanaAllMayMilktea Company has the following
Certificates of deposit totaling $124,000. How
items at year-end:
much should be reported as cash in the
statement of financial position? Cash in bank $30,000
a. $ 14,000
b. $13,500 Petty cash 500
c. $17,500
Commercial paper with maturity of 2
d. $131,500
months 8,200
o On January 1, 2010, A-B-GAYL Company
borrows $2,000,000 from National Bank at 11% Postdated checks 2,100
annual interest. In addition, A-B GAYL is
SanaAllMayMilktea should report cash and
required to keep a compensatory balance of
cash equivalents of
$200,000 on deposit at National Bank which
will earn interest at 5%. The effective interest a. $40,800
that A-B-GAYL pays on its $2,000,000 loan is b. $38,700
a. 11.5%. c. $30,000
b. 11.0%. d. $30,500
c. 11.6%.
d. 10.0%.
o If GustoKoNgKape company purchases The proper amount to be reported on RUTH's
merchandise on terms of 1/10, n/30, the cash statement of financial position for cash at
discount available is equivalent to what December 31, 2017 is
effective annual rate of interest (assuming a
a. $21,750
360-day year)?
b. $21,300
a. 18%
c. $20,400
b. 12%
d. $22,200
c. 1%
o The cash account shows a balance of $45,000
d. 30%
before reconciliation. The bank statement does
o If the month-end bank statement shows a
not include a deposit of $2,300 made on the
balance of $36,000, outstanding checks are
last day of the month. The bank statement
$12,000, a deposit of $4,000 was in transit at
shows a collection by the bank of $940 and a
month end, and a check for $500 was
customer's check for $320 was returned
erroneously charged by the bank against the
because it was NSF. A customer's check for
account, the correct balance in the bank
$450 was recorded on the books as $540, and a
account at month end is
check written for $79 was recorded as $97. The
a. $43,500
correct balance in the cash account was
b. $28,500
a. $45,512
c. $20,500
b. $45,728
d. $27,500
c. $45,548
o In preparing its bank reconciliation for the
d. $47,848
month of April 2017, GustoKoNaMagAral, Inc.
o In preparing its May 31, 2017 bank
has available the following information.
reconciliation, Rachel Co. has the following
Balance per bank statement, 4/30/17 $39,140 information available:

NSF check returned with 4/30/17 bank statement Balance per bank statement, 5/31/17 $30,000
450
Deposit in transit, 5/31/17 5,400
Deposits in transit, 4/30/17 5,000
Outstanding checks, 5/31/17 4,900
Outstanding checks, 4/30/17 (5,200)
Note collected by bank in May 1,250
Bank service charges for April 20
The correct balance of cash at May 31, 2017 is
What should be the correct balance of cash at April
a. $29,250
30, 2017?
b. $30,500
a. $38,490 c. $35,400
b. $38,470 d. $31,750
c. $38,940 o In preparing its August 31, 2017 bank
d. $39,370 reconciliation, SHALOM Corp. has available the
o RUTH, Inc.’s checkbook balance on December following information:
31, 2017 was $21,200. In addition, RUTH held
Balance per bank statement, 8/31/17 $21,650
the following items in its safe on December 31.
Deposit in transit, 8/31/17 3,900
(1) A check for $450 from AMOR, Inc. received
December 30, 2017, which was not included in the Return of customer's check for insufficient funds,
checkbook balance. 8/30/17 600

(2) An NSF check from TONI Company in the Outstanding checks, 8/31/17 2,750
amount of $900 that had been deposited at the
bank, but was returned for lack of sufficient funds Bank service charges for August 100
on December 29. The check was to be redeposited At August 31, 2017, SHALOM's correct cash balance
on January 3, 2018. The original deposit has been is
included in the December 31 checkbook balance.
a. $20,500
(3) Coin and currency on hand amounted to b. $22,800
$1,450. c. $22,100
d. $22,200
o LUKE, Inc. had the following bank reconciliation o As of June 30, the bank statement of Ang Po
at March 31, 2017: Trading had an ending balance of P373,612.
The following data were assembled in the
Balance per bank statement, 3/31/17 $37,200 course of reconciling the bank balance: 
o The bank erroneously credited Ang Po
Add: Deposit in transit 10,300
Trading for P2,150 on June 22.
47,500 o During the month, the bank charged back NSF
checks amounting to P2,340 of which P800 had
Less: Outstanding checks 12,600
been redeposited by the 25th of June.
Balance per books, 3/31/17 $ 34,900 o Collection for June 30 totalling P10,330 was
deposited the following month.
Data per bank for the month of April 2017 follow: o Checks outstanding as of June 30 were
Deposits $46,700 P30,205. o Notes collected by the bank for Ang
Po Trading were P8,150 and the corresponding
Disbursements 49,700
bank charges were P50.
All reconciling items at March 31, 2017 cleared the The adjusted bank balance on June 30 is
bank in April. Outstanding checks at April 30, 2017 a. P359,687
totaled $6,000. There were no deposits in transit at b. P358,147
April 30, 2010. What is the cash balance per books c. P351,587
at April 30, 2017? d. P353,927
o In connection with your reconstruction
a. $31,900
engagement, the Bacolod Company presented
b. $38,500
to you the following information regarding its
c. $28,200
Cash in Bank account for the month of
d. $34,200
o The GustoMoYon Co.’s ledger showed a balance in December, 2014:
its cash account at December 31, 2013 of P341,125 a) Balances per bank statements: November 30,
which was determined to consist of the following: P107,800, and December 31, P115,200.
b) Total charges in the bank statement during
Petty cash fund P 1,800 December were P1,094,850.
Cash in Allied Bank per bank statement with a check c) Receipt on December 15 paid out in cash for
for P3,000 still outstanding 168,375 expenses, P6,050.Recorded as receipts and
disbursements per books.
Notes receivable in the possession of a collecting d) Undeposited receipts were: November 30,
agency 12,500
P45,300 and December 31, P50,600.
e) Outstanding checks were: November 30,
Undeposited receipts, including postdated check for
P13,375, and December 31, P9,650, of which a
P5,250 and traveler’s check for P5,000 89,000
check for P2,500 was certified by the bank on
Bond sinking fund – cash 63,750 December 26.
f) NSF checks returned, recorded as reduction
IOUs signed by employees 2,475 of cash receipts, were: Returned by bank on
December, recorded also in December,
Paid vouchers not yet recorded 3,225 P5,200. Returned by bank on December but
recorded in January, P4,300
Total P341,125 g) Collections by bank not recorded by
Company were P60, 750 in November and P58,
At what amount should “Cash on hand and in bank”
200 in December
be reported on GustoMoYonl’s balance sheet?
. h) Bank service charges not entered in
a. P267,375
company’s books were: November 30, P3,750
b. P314,675 and December 31, P2,100. i) A check for P4,750
c. P331,125 of Buklod Company was charged to Bacolod
d. P250,925 Company in error.
j) A check drawn for P4,200 was erroneously
entered in the books as P2,400.
How much is the unadjusted cash balance per
books as of November 30, 2014?
 a. P204,225 o In connection with your reconstruction
b. P196,725 engagement, the Bacolod Company presented
c. P 82,725
to you the following information regarding its
d. P139,725
Cash in Bank account for the month of
o In connection with your reconstruction December, 2014:
engagement, the Bacolod Company presented a) Balances per bank statements: November
to you the following information regarding its 30, P107,800, and December 31, P115,200.
Cash in Bank account for the month of b) Total charges in the bank statement during
December, 2014: December were P1,094,850.
a) Balances per bank statements: November 30, c) Receipt on December 15 paid out in cash for
P107,800, and December 31, P115,200. expenses, P6,050. Recorded as receipts and
disbursements per books.
b) Total charges in the bank statement during d) Undeposited receipts were: November 30,
December were P1,094,850. P45,300 and December 31, P50,600.
e) Outstanding checks were: November 30,
c) Receipt on December 15 paid out in cash for
P13,375, and December 31, P9,650, of which a
expenses, P6,050. Recorded as receipts and
check for P2,500 was certified by the bank on
disbursements per books.
December 26.
d) Undeposited receipts were: November 30, f) NSF checks returned, recorded as reduction
P45,300 and December 31, P50,600. of cash receipts, were:

e) Outstanding checks were: November 30,  Returned by bank on December,

P13,375, and December 31, P9,650, of which a recorded also in December, P5,200.
check for P2,500 was certified by the bank on  Returned by bank on December but
December 26. recorded in January, P4,300
f) NSF checks returned, recorded as reduction of g) Collections by bank not recorded by
cash receipts, were: Returned by bank on Company were P60,750 in November and
December, recorded also in December, P5,200. P58,200 in December.
Returned by bank on December but recorded in
January, P4,300 h) Bank service charges not entered in
company’s books were: November 30,
g) Collections by bank not recorded by Company P3,750 and December 31, P2,100.
were P60,750 in November and P58,200 in
December. i) A check for P4,750 of Buklod Company
was charged to Bacolod Company in error.
h) Bank service charges not entered in company’s j) A check drawn for P4,200 was
books were: November 30, P3,750 and December erroneously entered in the books as P2,400.
31, P2,100.
How much is the unadjusted cash balance
i) A check for P4,750 of Buklod Company was as of December 31, 2014?
charged to Bacolod Company in error.
a. P103,900
j) A check drawn for P4,200 was erroneously b. P163,400
entered in the books as P2,400. c. P109,800
How much is the unadjusted book receipts for d. P113,400
December?

a. P1,116,150
b. P1,110,950
c. P1,098,850
d. P1,113,600
  In connection with your reconstruction Current liabilities reported in the December 31,
engagement, the Bacolod Company 2013, statement of financial position included:
presented to you the following information
regarding its Cash in Bank account for the Obligation on discounted notes receivable P155,000
month of December, 2014:
a) Balances per bank statements: November
Transactions during 2014 included the following:
30, P107,800, and December 31, P115,200.
b) Total charges in the bank statement  Sales on account were P7,670,000
during December were P1,094,850 . Cash collected on accounts totaled
P5,765,000, including accounts of P930,000
c) Receipt on December 15 paid out in cash for
with cash discounts of 2%.
expenses, P6,050. Recorded as receipts and
 Notes received in settlement of accounts
disbursements per books.
totaled P825,000
d) Undeposited receipts were: November 30,
P45,300 and December 31, P50,600.  . Notes receivable discounted as of
December 31, 2013, were paid at maturity
e) Outstanding checks were: November 30, with the exception of one P30,000 note on
P13,375, and December 31, P9,650, of which a which the company had to pay the bank
check for P2,500 was certified by the bank on P30,900, which include interest and protest
December 26. fees. It is expected that recovery will be
f) NSF checks returned, recorded as reduction made on this note early in 2015.
of cash receipts, were:  Customer notes of P585,000 were
 Returned by bank on December, recorded also
discounted with recourse during the year,
in December, P5,200.
proceeds from their transfer being
 Returned by bank on December but recorded
P585,000. (All discounting transactions
in January, P4,300
g) Collections by bank not recorded by were recorded as loans.) Of this total,
Company were P60,750 in November and P480,000 matured during the year without
P58,200 in December. notice of protest.
h) Bank service charges not entered in  Customer accounts of P87,200 were written
company’s books were: November 30, P3,750 off during the year as worthless.
and December 31, P2,100.  Recoveries of bad debts written off in prior
i) A check for P4,750 of Buklod Company was years were P20,200.
charged to Bacolod Company in error.  Notes receivable collected during the year
j) A check drawn for P4,200 was erroneously
totaled P270,000 and interest collected was
entered in the books as P2,400
P24,500.
How does the auditor typically test for the existence  On December 31, accrued interest on notes
of cash? receivable was P6,300.
 Cash of P350,000 was borrowed from Allied
a. Counting cash at the depository
institution Bank with accounts receivable of P400,000
b. Standard bank confirmation. being pledged on the loan. Collections of
c. Tracing the bank reconciliation to P195,000 had been made on these
the general ledger receivables [included in the total given in
d. Inquiry of management transaction (b)], and this amount was
o The adjusted trial balance of Austronesian applied on December 31, 2014, to payment
Corporation on December 31, 2013, includes of accrued interest on the loan of P6,000,
the following cash and receivables balances. and the balance to the partial payment of
Cash-Allied Bank P450,000 the loan.
Currency on hand 160,000  The petty cash fund was reimbursed
Petty cash fund 10,000 (meaning that cash was removed from the
Cash in bond sinking fund 150,000 bank account and placed in the petty cash
Notes receivable (including notes discounted fund) based following analysis of
with recourse, P155,000) 365,000 expenditure vouchers:
Accounts receivable P856,000
Allowance for doubtful accounts ( 41,500) 814,500
Interest receivable 5,250
Travel expense P1,120 with the exception of one P30,000 note on
which the company had to pay the bank
Entertainment expense 780
P30,900, which include interest and protest
Postage expense 930 fees. It is expected that recovery will be
made on this note early in 2015.
Office supplies expense 1,730  Customer notes of P585,000 were
discounted with recourse during the year,
Cash short and over (an income account) 60
proceeds from their transfer being
 Cash of P30,000 was added to bond P585,000. (All discounting transactions
retirement fund. were recorded as loans.) Of this total,
 Currency on hand at December 31, 2014, P480,000 matured during the year without
was P120,000. notice of protest.
 Total cash payments for all expenses during  Customer accounts of P87,200 were written
the year were P6,800,000. Charge to off during the year as worthless.
general expenses.  Recoveries of bad debts written off in prior
years were P20,200.
 Uncollectible accounts are estimated to be
 Notes receivable collected during the year
5% of the December 31, 2014, Accounts
totaled P270,000 and interest collected was
Receivable balance.
P24,500.
The total cash to be reported in the company’s  On December 31, accrued interest on notes
December 31, 2014 statement of financial receivable was P6,300.
position is  Cash of P350,000 was borrowed from Allied
Bank with accounts receivable of P400,000
a. P569,800
being pledged on the loan. Collections of
b. P555,700
P195,000 had been made on these
c. P574,300
receivables [included in the total given in
d. P574,180
transaction (b)], and this amount was
o The adjusted trial balance of Austronesian
applied on December 31, 2014, to payment
Corporation on December 31, 2013, includes
of accrued interest on the loan of P6,000,
the following cash and receivables balances.
and the balance to the partial payment of
Cash-Allied Bank P450,000
the loan.
Currency on hand 160,000
 The petty cash fund was reimbursed
Petty cash fund 10,000
(meaning that cash was removed from the
Cash in bond sinking fund 150,000
bank account and placed in the petty cash
Notes receivable (including notes discounted
fund) based following analysis of
with recourse, P155,000) 365,000
expenditure vouchers:
Accounts receivable P856,000
Travel expense P1,120
Allowance for doubtful accounts ( 41,500) 814,500
Entertainment expense 780
Interest receivable 5,250
Postage expense 930
Office supplies expense 1,730
Current liabilities reported in the December 31,
Cash short and over (an income account) 60
2013, statement of financial position included:
 Cash of P30,000 was added to bond
retirement fund.
Obligation on discounted notes receivable P155,000
 Currency on hand at December 31, 2014,
was P120,000.
Transactions during 2014 included the following:
 Total cash payments for all expenses during
 Sales on account were P7,670,000 the year were P6,800,000. Charge to
. Cash collected on accounts totaled general expenses.
P5,765,000, including accounts of P930,000  Uncollectible accounts are estimated to be
with cash discounts of 2%. 5% of the December 31, 2014, Accounts
 Notes received in settlement of accounts Receivable balance.
totaled P825,000
 . Notes receivable discounted as of
December 31, 2013, were paid at maturity
The doubtful accounts expense to be recognized  On December 31, accrued interest on notes
for the year ended December 31, 2014 is receivable was P6,300.
 Cash of P350,000 was borrowed from Allied
a. P117,940
Bank with accounts receivable of P400,000
b. P117,010
being pledged on the loan. Collections of
c. P 92,440
P195,000 had been made on these
d. P 91,510
receivables [included in the total given in
o The adjusted trial balance of Austronesian
transaction (b)], and this amount was
Corporation on December 31, 2013, includes
applied on December 31, 2014, to payment
the following cash and receivables balances.
of accrued interest on the loan of P6,000,
Cash-Allied Bank P450,000
and the balance to the partial payment of
Currency on hand 160,000
the loan.
Petty cash fund 10,000
 The petty cash fund was reimbursed
Cash in bond sinking fund 150,000
(meaning that cash was removed from the
Notes receivable (including notes discounted
bank account and placed in the petty cash
with recourse, P155,000) 365,000
fund) based following analysis of
Accounts receivable P856,000
expenditure vouchers:
Allowance for doubtful accounts ( 41,500) 814,500
Travel expense P1,120
Interest receivable 5,250
Entertainment expense 780
Postage expense 930
Current liabilities reported in the December 31,
Office supplies expense 1,730
2013, statement of financial position included:
Cash short and over (an income account) 60

Obligation on discounted notes receivable P155,000  Cash of P30,000 was added to bond
retirement fund.
 Currency on hand at December 31, 2014,
Transactions during 2014 included the following: was P120,000.
 Sales on account were P7,670,000  Total cash payments for all expenses during
. Cash collected on accounts totaled the year were P6,800,000. Charge to
P5,765,000, including accounts of P930,000 general expenses.
with cash discounts of 2%.  Uncollectible accounts are estimated to be
 Notes received in settlement of accounts 5% of the December 31, 2014, Accounts
totaled P825,000 Receivable balance.
 . Notes receivable discounted as of
The net accounts receivable as of Dec. 31, 2014 is
December 31, 2013, were paid at maturity
with the exception of one P30,000 note on a. P1,713,190
which the company had to pay the bank b. P1,738,690
P30,900, which include interest and protest c. P1,756,360
fees. It is expected that recovery will be d. P1,730,860
made on this note early in 2015. o The adjusted trial balance of Austronesian
 Customer notes of P585,000 were Corporation on December 31, 2013, includes
discounted with recourse during the year, the following cash and receivables balances.
proceeds from their transfer being Cash-Allied Bank P450,000
P585,000. (All discounting transactions Currency on hand 160,000
were recorded as loans.) Of this total, Petty cash fund 10,000
P480,000 matured during the year without Cash in bond sinking fund 150,000
notice of protest. Notes receivable (including notes discounted
 Customer accounts of P87,200 were written with recourse, P155,000) 365,000
off during the year as worthless. Accounts receivable P856,000
 Recoveries of bad debts written off in prior Allowance for doubtful accounts ( 41,500) 814,500
years were P20,200. Interest receivable 5,250
 Notes receivable collected during the year
totaled P270,000 and interest collected was Current liabilities reported in the December 31,
P24,500. 2013, statement of financial position included:
 Obligation on discounted notes receivable P155,000  Currency on hand at December 31, 2014,
was P120,000.
Transactions during 2014 included the following:  Total cash payments for all expenses during
the year were P6,800,000. Charge to
 Sales on account were P7,670,000 general expenses.
. Cash collected on accounts totaled  Uncollectible accounts are estimated to be
P5,765,000, including accounts of P930,000
5% of the December 31, 2014, Accounts
with cash discounts of 2%.
Receivable balance.
 Notes received in settlement of accounts
totaled P825,000 In determining validity of accounts receivable,
 . Notes receivable discounted as of which of the following would you consider as
December 31, 2013, were paid at maturity most reliable?
with the exception of one P30,000 note on
a. Documentary evidence that supports the
which the company had to pay the bank
accounts receivable balance
P30,900, which include interest and protest
b. Direct telephone communication between
fees. It is expected that recovery will be
auditor and debtor
made on this note early in 2015.
c. Credits to accounts receivable from the
 Customer notes of P585,000 were
cash receipts book after the close of
discounted with recourse during the year,
business at year end
proceeds from their transfer being
d. Confirmation replies received directly from
P585,000. (All discounting transactions
customers
were recorded as loans.) Of this total,
P480,000 matured during the year without
notice of protest.
 Customer accounts of P87,200 were written
off during the year as worthless.
 Recoveries of bad debts written off in prior
years were P20,200.
 Notes receivable collected during the year
totaled P270,000 and interest collected was
P24,500.
 On December 31, accrued interest on notes
receivable was P6,300.
 Cash of P350,000 was borrowed from Allied
Bank with accounts receivable of P400,000
being pledged on the loan. Collections of
P195,000 had been made on these
receivables [included in the total given in
transaction (b)], and this amount was
applied on December 31, 2014, to payment
of accrued interest on the loan of P6,000,
and the balance to the partial payment of
the loan.
 The petty cash fund was reimbursed
(meaning that cash was removed from the
bank account and placed in the petty cash
fund) based following analysis of
expenditure vouchers:
Travel expense P1,120
Entertainment expense 780
Postage expense 930
Office supplies expense 1,730
Cash short and over (an income account) 60
 Cash of P30,000 was added to bond
retirement fund.