1st Activity Cash and Cash Equivalents Bank Reconciliation Proof of Cash
1st Activity Cash and Cash Equivalents Bank Reconciliation Proof of Cash
Intermediate Accounting I
FIRST ACTIVITY
Instructions: Read each question carefully then choose the correct/best answer.
1. The amount reported as "Cash" on a company's statement of financial position normally should
exclude
a. postdated checks that are payable to the company.
b. cash in a payroll account.
c. undelivered checks written and signed by the company.
d. petty cash.
6. On January 1, 2002, Kyle Corporation established a petty cash fund of ₱400. On December 31,
2002, the petty cash fund was examined and found to have receipts and documents for
miscellaneous expenses amounting to ₱364. In addition, there was cash amounting to ₱44. What
entry would be required to record replenishment of the petty cash fund on December 31, 2002?
7. On December 31, 2009, West Company had the following cash balances:
Tran’s policy is to treat as cash equivalents all highly liquid investments with a maturity of three
months or less when purchased. What amount should Trans report as cash and cash equivalents in
its December 31, 2009, balance sheet (statement of financial position)?
a. P110,000
b. P385,000
c. P460,000
d. P860,000
Additional information:
Cash on hand includes undeposited collections of P60,000.
The cash in bank – savings maintained at BPI includes a P150,000 compensating balance which is
not restricted.
10. As of December 31, 20x1, the petty cash fund of TUMULT COMMOTION Co. with a general
leger balance of P15,000 comprises the following:
Coins and currencies P 2,550
Petty cash vouchers:
Gasoline for delivery equipment P3,000
Medical supplies for employees 2,040 5,040
IOU’s:
Advances to employees 2,220
A sheet of paper with names of several employees
together with contribution to bereaved employee,
attached is a currency of 2,400
Checks:
Check drawn to the order of the petty cash custodian 3,000
Personal check drawn by the petty cash custodian 2,400
The entry to record the replenishment of the petty cash fund includes
a. A debit to cash short/overage account of P2,190 and a credit to cash on hand of P9,450.
b. A credit to cash short/overage account of P810 and a credit to cash of P12,450.
c. A debit to cash short/overage account of P810 and a credit to petty cash fund of P12,450.
d. A debit to cash short/overage account of P2,190 and a credit to cash in bank of P9,450.
11. It is a report that is prepared for the purpose of bringing the balances of cash per records and per
bank statement into agreement.
a. Bank statement
b. Check Disbursement Voucher
c. Bank reconciliation
d. Bank deposit slip
12. These are deposits made but not yet credited by the bank to the depositor’s bank account.
a. Credit memos (CM)
b. Debit memos (DM)
c. Outstanding checks (OC)
d. Deposits in transit (DIT)
13. These are deductions made by the bank to the depositor’s bank account but not yet recorded by
the depositor.
a. Credit memos (CM)
b. Debit memos (DM)
c. Outstanding checks (OC)
d. Deposits in transit (DIT)
14. These are additions made by the bank to the depositor’s bank account but not yet recorded by
the depositor.
a. Credit memos (CM)
b. Debit memos (DM)
c. Outstanding checks (OC)
d. Deposits in transit (DIT)
15. These are checks drawn and released to payees but are not yet encashed with the bank.
a. Credit memos (CM)
b. Debit memos (DM)
c. Outstanding checks (OC)
d. Deposits in transit (DIT)
16. Which of the following is added to the cash balance per books when preparing a bank
reconciliation statement?
a. Credit memo
b. Debit memo
c. Outstanding check
d. Deposit in transit
17. Which of the following is added to the cash balance per bank statement when preparing a bank
reconciliation statement?
a. Credit memo
b. Debit memo
c. Outstanding check
d. Deposit in transit
21. Entity A is preparing its November 30, 20x1 bank reconciliation statement. The following
information was determined:
22. Entity A is preparing its February 28, 20x1 bank reconciliation statement. The following
information was determined:
Cash balance per accounting books, Feb. 28, 20x1 ₱260,000
Cash balance per bank statement, Feb. 28, 20x1 ₱205,000
23. Entity A is preparing its March 31, 20x1 bank reconciliation. The following information was
determined:
a. The cash balance per books is ₱280,000 while the cash balance per bank statement is ₱320,000.
b. Credit memo – ₱20,000
c. Debit memo – ₱15,000
d. Deposits in transit – ₱75,000
e. Outstanding checks – ₱25,000
f. The disbursements per books are overstated by ₱45,000.
g. The bank debits are understated by ₱40,000.
24. Data concerning the cash records of Arones Company for the months of November and
December 20x1 are shown below:
November 30 December 31
Book balance 11,200 ?
Book debits 63,800
Book credits 56,400
Bank balance 30,000 40,800
Bank debits ?
Bank credits 54,600
Notes collected by bank 4,500 6,000
Bank service charge 40 200
NSF checks 1,760 2,800
Overstatement of check in payment
of salaries 3,800 2,400
Deposit in transit 12,000 22,500
Outstanding checks 19,500 35,700
Deposit of 123 Corporation erroneously
credited to ABC Co.’s account 4,800 3,600
How much is the adjusted cash balance per book for the month of November?
a. P13,900
b. P22,500
c. P17,700
d. P27,300
25. According to the provided information in Question 24, how much is the bank debits for the
month of December?
a. P56,400
b. P55,200
c. P43,800
d. P54,600
26. According to the provided information in Question 24, how much is the adjusted cash balance
per bank for the month of December?
a. P24,000
b. P27,600
c. P21,600
d. P31,200
27. According to the provided information in Question 24, how much is the adjusted bank receipts
for December?
a. P54,600
b. P61,500
c. P65,100
d. P65,300
28. According to the provided information in Question 24, how much is the adjusted book
disbursements for December?
a. P55,200
b. P56,400
c. P60,000
d. P64,800
29. According to the provided information in Question 24, how much is the adjusted cash balance
per book for the month of December?
a. P21,600
b. P27,600
c. P24,000
d. P31,200
30. According to the provided information in Question 24, how much is the book balance for
December 31?
a. P18,600
b. P40,800
c. P24,000
d. P11,200
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