Answer the following questions:

223 c has tripled the balance of your account. d. is giving you a car because you won a raffle draw. received your bank statement. You noticed that the #2M check is not reflected in the statement. What should you do? 2 The bank sends you a memorandum informing you that they Call your friends and celebrate, telling them that you just saved $2M. have increased the balance of your account. This is a Call the supplier and demand him or her to go to the bank a. debit memo. c. finding memo. and present the check for payment. b. credit memo. d. mamemi memo C Likes. Post the incident on your Facebook page and wait for 3. At 4:59 PM on December 31, 2018, you deposited PIM to your d account. The bank cut-off time on that date is 4 30 PM. This Treat the $2M check as outstanding check in your bank reconciliation for today. means that deposits after 4:30 PM are considered deposits on January 2 2019 (January 1. 2019, New Year's Day, is a non The cash balance shown in your general ledger is P2M, while banking day). When you received your December 2018 bank the cash balance shown in your bank statement is $500,000. statement in the first week of January 2019, you cannot find You will most likely feel relieved if the reconciling items the PIM deposit in that statement! What should you do? include a. Call the bank manager and complain like a mad animal. a. a $1 2M deposit in transit. b. Report to Mr. Police Officer that the bank just robbed you b. a $1 2M outstanding check. of PIM. c a book error pertaining to a 91.2M overstatement of book Cry like a little baby and suck the thumb of your right debits. foot. d. a p12M debit memo. d. Treat the PIM deposit as deposit in transit in your December 31, 2018 bank reconciliation. 7. When preparing a bank reconciliation, interest credited to the entity's bank account but not yet recorded in the books of You texted Papa to make "padala" of P10M because you need accounts is to buy some adverbs and adjectives. Papa texted back telling a added to the balance of cash per books. you that he deposited a $10M check in your account You b. deducted from the balance of cash per books. went to the bank to withdraw the money but the bank teller c. added to the balance per bank statement. told you that you cannot - not until after three days when the d. deducted from the balance per bank statement. check has cleared, What should you do? a. Call Papa and tell him hurtful words. Which of the following is added to the balance of cash per b. Report to the NBI that Papa is a big liar. bank statement in order to arrive at the unadjusted balance of Run around screaming like a spoiled brat. cash per books? d. Treat the PIUM check deposit as deposit in transit in your a. Credit memo c. Outstanding checks bank reconciliation for today. b. Debit memo d. Erroneous bank credit 5. Yesterday, you wrote a $2M check and gave it to a supplier as payment for the goods you have purchased. Today, youPROBLEM 14: MUTLIPLE CHOICE 1. A company has P1,922,000 balance per books, P311,000 deposit In transit, P253,000 outstanding checks, P118,000 credit memo and P65,000 NSF check. What is the adjusted cash balance? a. P1,585,000 c. P1,787,000 b. P1,975,000 d. P1,722,000 2. An entity has P2,201,000 cash balance per books, P521,000 deposit in transit, P543,000 outstanding checks, P390,000 notes collected by the bank from the entity's customers, P600 bank service charge and P89,000 DAIF check. What is the adjusted cash balance? a. P2,048,000 c. P2,501,400 b. P2,502,600 d. P2,179,000 3. A company has P1,833,000 cash balance per bank statement, P652,000 deposits in transit, P563,000 NSF check, P212,000 erroneous deduction by the bank from the company's account, and P320,000 outstanding checks. What is the adjusted cash balance? a. P1,585,000 c. P1,922,000 b. P2,377,000 d. P2,165,000226 Which of the following is not an internal control over cash? 9. A company recorded a check withdrawal of P89,500 a Regular bank reconciliations c. Voucher system P85,900. The check cleared the bank at the correct amount of b Imprest system d. Skeletal system P89,500. What is adjustment to correct the cash balance per books? Immediately after receiving each monthly bank statement, a a. P59,500 addition to the book balance. business owner compares the amounts shown on the b. P89,500 deduction from the book balance statement with amounts in the accounting records. The P3,600 addition to the book balance. business owner is implementing an internal control called d. P3,600 deduction from the book balance. a. Regular bank reconciliations. c. Voucher system Imprest system. d. Awesomeness system. 10. The company's records show a cash balance of P42,500 but the bank statement shows a balance of P40,060. If there is only one 6 Imagine you are a business owner. To be awesome, you reconciling item, the P2,500 difference would most likely be should do all of the following except a(an) a. deposit all collections intact a NSF check c outstanding check b. make disbursements only through checks, supported by b. overstated book credit d credit memo CDVS. c prepare bank reconciliations on a monthly basis. d. let your employees use your collections for both business PROBLEM 15: MULTIPLE CHOICE needs and their personal needs, like spa and auto-load I. It is any action taken or process set by management that is designed to help the business organization achieve its Use the following information for the next three questions objectives You told your employees not to use the collections from the a External control c. Internal control business operations. Instead, they have to deposit the collections b. Bank reconciliation d. Vision/Mission statement to the business' bank account on a daily basis. If cash is needed for business operations, you told them that they have to prepare a 2. It is a report prepared for each check written. CDV to request for the fund and you will write a check a. Bank reconciliation corresponding to the amount indicated on the CDV. b. Check Written Report (CWR) C Check Disbursement Voucher (CDV) 7. Mr. George Bibo, one of your employees, asked "What about if d Bank statement I need to be reimbursed for a transportation expense amounting to only $50. Would you still write a check for it?" 3. A petty cash fund is intended for What will you tell Mr. George? a. small or petty disbursements. a. Sure man! No probs. b. large disbursements, b. What???? You dare question my authorityzationing? c. the happy-happy of employees d. All of these c. Let me get back to you Mr. George. I will ask first my Mama.224 Chapter $ Bank Rec 9. If the ledger balance of cash is greater than the correct cash 4 AC balance and neither the entity nor the bank has made any P35 error, there must be a(an) dep a. credit memo c. outstanding check. serv b. debit memo. d. deposit in transit. adju 10. If the balance of cash per bank statement is less than the b correct cash balance and neither the entity nor the bank has made any error, there must be a(an) 5 AC a credit memo. c. outstanding check. P50 b. debit memo. d. deposit in transit. dep chePROBLEM 12: MUTLIPLE CHOICE a. A collection directly deposited by the customer to the 1. A bank reconciliation is depositor's account. a, a formal financial statement that lists all the bank account b . A check drawn and released to the payee but the payee balances of an entity. has not yet encashed b. a merger of two banks that previously were competitors. C. No sufficient funds (NSF) check C a statement sent by the bank to a depositor showing d. A bank charge for a check book. information on the depositor's account. d. a schedule that is prepared to account for the difference Which of the following is not a bank reconciling item? between the balance of cash in the entity's records and the a. A deposit made to the bank but not yet credited to the balance shown in the bank statement. depositor's account. b. A check drawn and released to the payee but not yet 2. Bank reconciliations are typically prepared for presented to the bank for payment. c. time deposits. a. savings accounts. C . An erroneous debit made by the bank to the depositor's b. current accounts. d. alkansya account. d. Direct deposits of customers to the entity's account. 3. Direct deposits of customers to an entity's bank account give rise to 9 When preparing a bank reconciliation, credit memorandums credit memo. c. debit memo. from the bank are b. deposits in transit d. outstanding checks. a. added to the balance of cash per books. b. deducted from the balance of cash per books. Outstanding checks include which of the following? c. added to the balance per bank statement. a. Postdated check drawn and given to the payee d. deducted from the balance per bank statement. b. Stale check c. Certified check 10. An NSF or DAIF check appears on a bank reconciliation as d. Check drawn (dated at the date the check was written), a(an) given to the payee, but the payee has not yet encashed. a. addition to the balance of cash per books. b. deduction from the balance of cash per books. 5. Which of the following is not a book reconciling item? c. addition to the balance of cash per bank statement. a. Book error c. Deposit in transit d. deduction from the balance of cash per bank statement. b. Credit memo d. Debit memo 6. Which of the following is not a bank reconciling item? PROBLEM 13: MUTLIPLE CHOICE a. Deposit in transit c. Bank error 1. When the bank informs you that they have debited your b. Credit memo d. Outstanding check account (debit memo), this means that the bank a, has increased the balance of your account. 7. Which of the following is not a book reconciling item? b. has decreased the balance of your account.225 A company has P1,200,000 cash balance per bank statement, p350,000 deposit in transit, P1,000 interest earned on the deposit not yet recorded in the books of accounts, P900 bank service charge and P200,000 outstanding check. What is the adjusted cash balance? a. P1,350,000 b. P1,750,100 C. P1,349,100 d. P1,351,000 5 A company has P1,700,000 cash balance per bank statement, P500,000 deposit in transit, P5,000 interest earned on the deposit, net of tax, P1,000 service charge, P350,000 outstanding checks, and P90,000 NSF check. What is the adjusted cash balance? a. P2,114,000 C. P1,349,100 b. P1,750,100 d. P1,850,000 6. A company has P2,320,000 cash balance per bank statement, P456,000 deposit in transit, P320,000 NSF check and P278,000 outstanding check. What is the adjusted cash balance? a. P2,178,000 C. P2,498,000 b. P2,456,000 d. P2,142,000 7. A company has P1,578,000 cash balance per bank statement, P433,000 deposit in transit, P253,000 NSF check, P105,000 erroneous credit by the bank to the entity's account, and P321,000 outstanding check. What is the adjusted cash balance? a. P1,585,000 C. P1,542,000 b. P1,332,000 d. P1,795,000 8. A bookkeeper erroneously recorded a deposit of P580 as P850. What is the adjustment in the bank reconciliation? a. P850 addition to the book balance b. P850 deduction from the book balance c. P270 addition to the book balance d. P270 deduction from the book balance