21. It consists of misappropriating a collection from one

customer and concealing this defalcation by applying a

subsequent collection made from another customer.

a. Window dressing c. Kiting

b. Lapping d. Imprest system

22. The payments of accounts payable made subsequent to

the close of the accounting period are recorded as if

they were made at the end of the current period.

a. Window dressing c. Kiting

b. Lapping d. Imprest system

23. A petty cash system is designed to

a. Cash checks for employees

b. Handle cash sales

c. Account for all cash receipts and disbursements

d. Pay small miscellaneous expenses

24. Which of the following is true regarding the imprest

petty cash system?

a. Entries are made to the Petty Cash account only to

increase or decrease the size of the fund.

b. The Petty Cash account is debited when the fund is

replenished.

c. The imprest petty cash system in effect adheres to

the rule of disbursement by check.

d. All of these are not true.

Use the following information for the next three questions.

The petty cash fund of Guiguinto Company on December

31 is composed of the following:

Coins and currencies P14,000

Petty cash vouchers:

Gasoline payments 3,000

Supplies 1,000

Cash advances to employees 2,000

Employee's check returned by bank

marked NSF

5,000

Check drawn by the company payable to

the order of the petty cash custodian,

representing her salary

20,000

A sheet of paper with names of

employees together with contribution

for a birthday gift of a co-employee in

the amount of

8,000

P53,000

The petty cash ledger account has an imprest balance

of P50,000.

25. What is the correct amount of petty cash on December

31?

a. P34,000 c. P39,000

b. P14,000 d. P42,000

26. The adjusting entry at December 31 would include a

a. Debit to Cash of P16,000

b. Debit to Expenses of P11,000

c. Credit to Cash Short or Over of P5,000

d. Credit to Petty Cash Fund of P16,000

27. A cash over or short account

a. Is not generally accepted

b. Is debited when the petty cash fund proves out

over

c. Is debited when the petty cash fund proves out

short

d. Is a contra account to cash

28. Which statement is incorrect regarding presentation

and disclosure of cash and cash equivalents?

a. Cash and cash equivalents are normally presented

as the first line item under current assets.

b. The entity should disclose the components of cash

and cash equivalents.

c. The entity should disclose the amount of

significant cash and cash equivalent balances

held by the entity that are not available for use

by the group.

d. Cash on hand should be included under the

disclosures on credit risk.

29. Which statement is true?

a. Certificates of deposit are usually classified as cash

on the statement of financial position.

b. Companies include postdated checks and petty

cash funds as cash.

c. Cash equivalents are investments with original

maturities of six months or less.

d. Savings accounts are usually classified as cash on

the statement of financial position.

PLEASE EXPLAIN EACH PROBLEM. STRICTLY CORRECT ANSWERS ONLY.