https://www.coursehero.

com/file/99800066/MCQs-FAR-Cash-and-Cash-Equivalentsdocx/

https://www.studocu.com/ph/document/cebu-institute-of-technology-university/financial-accounting/
cash-and-cash-equivalents-test-questions/23984373

An entity provided the following-data on December 31, 2020:

Checkbook balance 5,000,000

Bank statement balance 4,000,000

Check drawn on entity‘s account, payable to supplier, dated and recorded on December 31, 2020 but not
mailed until January 31, 2021 1,000,000

Cash in sinking fund 1,500,000

Treasury bills, purchased November 1, 2020 and maturing January 31, 2021 2,500,000

Time deposit, purchased October 1, 2020 and maturing January 31, 2021 2,000,000

1. What amount should be reported as cash and cash equivalents on December 31, 2020?

a.8,000,000

b. 8,500,000

c.7,500,000

d.6,000,000

An entity had the following cash balances on December 31, 2020:

Cash in bank 5,000,000

Petty cash fund, all funds were reimbursed on December 31, 2020 50,000

Money market placement or commercial papers 1,500,000

Saving deposit 800,000

Cash in bank included P500,000 of compensating balance against short-term borrowing arrangement on
December 31, 2020. The compensating balance is legally restricted as to withdrawal. A check of
P1,000,000 dated January 31, 2021 in payment of accounts payable was recorded and mailed on
December 31, 2020.

2. What amount should be reported as cash and cash equivalents on December 31, 2020?
a.6,350,000

b. 7,850,000

c.6,850,000

d.5,550,000

(3-4) An entity had the following account balances on December 31, 2020.

Cash on hand, including a customer check P100,000 dated January 31, 2021500,000

Cash in bank — current account4,000,000

Cash in bank — payroll account1,000,000

Cash in bank — restricted account for plant addition expected to be disbursed in 2021500,000

Cash in sinking fund set aside for bond payable due December 31, 20211,500,000

Three-month time deposit2,000,000

Traveler’s check200,000

Manager’s check300,000

Money order100,000

3. What total amount should be reported as cash under current assets?

a. 7,500,000

b.9,500,000

c.7,600,000

d.6,000,000

4. What total amount should be reported as cash equivalents?

a. 2,000,000

b.2,600,000

c.3,500,000

d.4,000,000

An entity reported an imprest petty cash fund of P50,000 with the following details:
Currencies20,000

Coins2,000

Petty cash vouchers: Gasoline payments for delivery equipment3,000

Medical supplies for employees1,000

Repairs of office equipment1,500

Loans to employee3,500

A check drawn by the entity payable to the order of the petty cash custodian representing salary for the
month15,000

An employee’s check returned by the bank for insufficiency of fund3,000

A sheet of paper with names of several employees together with contribution for a birthday gift of a co-
employee. Attached to the sheet of paper is a currency of 5,000

5. What amount of petty cash und should be reported in the statement of financial position?

a.42,000

b.27,000

c.37,000

d.22,000

7. On April 1, 2013, Mirror Company established an imprest petty cash fund for P10,000 by writing a
check drawn against its checking account. On April 30, 2013, 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, 2013, 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 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 customer’s check for P62,000 returned because it was NSF. A
customer’s check for P35,000 was recorded on the books as P74,000 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

9. In an audit of Ben Company on December 31, 2013,the following data are gathered:

Balance per book 2,000,000

Bank charges 2,000

Outstanding checks 235,000

Deposit in transit 300,000

Customers note collected by bank 380,000

Interest on customer note 17,000

Customer check returned NSF 58,000

Depositor’s note charged to account 150,000

What is the adjusted cash in bank on December 31,2013?

a. 1,575,000

b. 2,065,000

c. 2,187,000

d. 1,325,000

On December 31, 2011, the cash account of Emerson Company has a debit balance of P3,500,000. An
analysis of the cash account shows the following details:
Undeposited collections P 60,000

Cash in bank-PCIB checking account 500,000

Cash in bank-PNB (overdraft) (50,000)

Undeposited NSF check received from a customer, dated December 1, 2011 15,000

Undeposited check from a customer, dated January 15, 2012 25,000

Cash in bank-PCIB (fund for payroll) 150,000

Cash in bank-PCIB (savings deposit) 100,000

Cash in bank-PCIB (money market instrument, 90 days) 2,000,000

Cash in foreign bank (restricted) 100,000

IOUs from officers 30,000

Sinking fund cash 450,000

Listed stock held as temporary investment 120,000

Total P3,500,000

Cash and cash equivalents on Emerson’s December 31, 2011 balance sheet should be

a. P2,760,000

b. P2,810,000

c. P2,885,000

d. P2,935,000

21. The December 31, 2011 trial balance of Emerson Co. contained the following accounts:

Checking account balance- BPI P1,000,000

Certificate of deposit 1,400,000

Cash advances to a subsidiary 900,000

Deposit paid to utility companies 20,000

Checking account balance no. 1 – BDO 500,000

Checking account balance no. 2 – BDO (100,000)

Cash on hand (including a post dated check for P10,000 and a certified check for P45,000) 250,000

Cash held as bond sinking fund 200,000

Money market balance at a mutual fund (with checking privileges) 300,000

The cash and cash equivalents of Emerson Company should be

a. P3,510,000

b. P3,355,000

c. P3,295,000

d. P3,455,000

22. While checking the cash accounts of the ABC Co. on December 31, 2011, you find the following
information:

Balance per books P67,760

Balance in checking account (outstanding checks per books of P9,876) 65,323

Deposit in bank closed by BSP 16,000

Deposit in transit 12,345

Currency and coins counted 9,500

Petty cash fund (of which P450 is in the form of paid vouchers) 1,000

Bank charges not yet taken up in the books 58

Bond sinking fund cash 10,000

Receivables from employees 700

Error in recording a check in the books. The correct amount as paid by the bank is P890 instead
of P980 as recorded in the books, or a difference of… 90

The correct cash in bank balance for ABC Co. on December 31, 2011 is

a. P55,415

b. P70,229

c. P67,792

d. P83,792

In your audit of Emerson Company as of December 31, 2011, you gathered the following information:
Balance per bank P5,000,000

Deposit in transit 2,500,000

Outstanding checks 1,200,000

Customer’s note collected by bank 650,000

Customer’s NSF check 148,000

Checkbook printing charge 2,000

Certified checks included in the outstanding checks 300,000

Depositor’s note charged to account 200,000

The cash balance per book of Emerson Company on December 31, 2011 is

a. P6,600,000

b. P6,300,000

c. P6,100,000

d. P6,950,000