Fundamentals of Accountancy, Business and Management 2

BANK RECONCILIATION

DIRECTION: Read and understand each question carefully. Write only the letter of the correct answer. 1. The process by which the government collects revenue in order to pay for its expenses is called? a. Collection b. Revenue C. Tax d. Taxation 2. Which of the following is required by the state to pay for the tax for income earned within and outside the Philippines? a. Domestic corporation b. Foreign corporation c. Non-resident alien d. OFW 3. The following are required to pay income tax from sources within the Philippines only, except: a. OFW b. Resident alien c. Resident citizen d. Non-resident citizen 4. Which of the following is not considered a statutory deduction? a. 13" Month Pay & bonuses b. Philhealth c. Pag-ibig d. 555 5. Which of the following refers to the income derived/earned by an employee? a. Compensation Income b. Corporate Income c. Business Income d. none of these 6. When should individuals earning purely compensation income as employees file their income tax return? a. on or before April 15 b. on or before May 15 c. on or before August 15 d. on or before December 31 7. Which of the following BIR Form should be used by non-individual taxpayers when filing for income tax returns? a. eBIR Form 1700 b. eBIR Form 1701 c. eBIR Form 1702 d. eBIR Form 1703 8. Which of the following refers to tax imposed on the right or privilege to engage in an onerous transfer of goods or services in the normal conduct of business? a. Taxation b. Income Tax c. Business Tax d. none of these 9. What BIR form is required in filing tax if taxpayers derive their income purely from compensation? a. BIR Form 0605 b. BIR Form 2316 c. BIR Form 1700 d. BIR Form 1701 10. Based on the TRAIN Law, how much is the annual income of a person to be exempted in paying personal income tax (PIT)? a. P150,000- and below b. P200,000- and below c. P250,000- and below d. P300,000- and below 11. It is the power of the state to forcibly take someone's private property such as land or building and use it for public purpose: a. Police Power b. Power of Imminent Domain c. Power to Taxation d. none of theseIl. The bank statement of Top Company shows a balance per bank of P16,997.45 on May 31,2021. On this date the balance of cash per book is P12,589.95. Additional information: Deposits in transit: May 31 deposit (received by the bank on June 1- P2, 312.40) Outstanding checks: No. 453- P3, 200.00 No. 457 - 1,401.30 No. 460 - 1,849.60 Error: Top wrote check no. 443 for P1,227.00 and the bank correctly paid that amount. However, the bookkeeper recorded the check as P1, 272.00. Bank memo: Debit- NSF check from Nipp P1,200.50 Debit- Charge for check book P200.00 Credit - Collection of note receivable for P1,500 plus interest earned of P150, less bank collection fee of P25.00. 11. Using the adjusted balance method, how much is the adjusted book balance? a. P12,858.95 b. P12,768.85 C. P12,668.85 d. P12,678.95 12. What is the effect of the error to the book of Top Company? a. Cash was understated b. Cash was overstated c. Cash deficit d. no effect 13. The adjusting entry for the NSF check is: a. Cash in Bank P1,200.50 c. Cash in Bank P1,200.50 Accounts Receivable P1, 200.50 Accounts Payable PP1, 200.50 b. Accounts Receivable P1, 200.50 d. Accounts Payable P1,200.50 Cash in Bank P1,200.50 Cash in Bank P1,200.5014. How much is the interest income? a. P150.00 b. P125.00 c. P1500.00 P1,650.00 15. What is the adjusting entry for error? a. Debit to Cash in bank P45.- c. Debit to Accounts Receivable of P45.- b. Credit to Cash in bank P45.- d. Credit to Accounts Payable of P45.- 16. How much is the total debit memo? a. P1,650.- b. P1500.- c. P1,350.50 d. P1,200.50 17. How much is the total credit memo? a. P1,425.50b. P1,225.50 C. P1, 200.50 d. P1,050.50 18. In recording the adjusting entry for the interest earned, what account is to be credited? a. Interest Income b. Interest Expense C. Accrued Interest d. Interest Payable 19. What is the adjusting entry for deposit in transit? a. Debit cash in bank c. Debit cash on hand b. Credit cash in bank d. none of these 20. If instead of error in writing the amount, the bookkeeper really missed to record such, what would be its effect in the cash balance of the entity? a. Cash is overstated b. cash is understated c. there is a cash shortage d. no effectI. Tell whether the transaction is a BOOK or a BANK reconciling item. (Write only BOOK or BANK) 1. The bank statement for August 2014 shows an ending balance of P3,490. 2. On August 31 the bank statement shows charges of P35 for the service charge for maintaining the checking account. 3. On August 28 the bank statement shows a return item of P100 plus a related bank fee of P 10. The return item is a customer's check that was returned because of insufficient funds. 4. The bank statement shows a charge of P80 for check printing on August 20. 5. The bank statement shows that P8 was added to the checking account on August 31 for interest earned by the company during the month of August. 6. The bank statement shows that a note receivable of P1,000 was collected by the bank on August 29 and was deposited into the company's account. On the same day, the bank withdrew P40 from the company's account as a fee for collecting the note receivable. 7. The company's Cash account at the end of August shows a balance of P967. 8. On August 29 the company's Cash account shows cash sales of P145. The bank statement shows the amount deposited was actually P154. The company reviewed the transactions and found that P154 was the correct amount. 9. During the month of August the company wrote checks totaling more than P50,000. As of August 31 P3,021 of the checks written in August had not yet cleared the bank and P200 of checks written in June had not yet cleared the bank. 10. The P1,450 of cash received by the company on August 31 was recorded on the company's books as of August 31. However, the P1, 450 of cash receipts was deposited at the bank on the morning of September 1.12. Refers to an individual residing in the Philippines but is not a citizen there of : a. Resident citizen b. Resident Alien c. Non-Resident citizen d. Non-Resident Alien 13. Which of the following statements is FALSE about the value-added tax (VAT)? a. It is an indirect tax which is passed on to consumers. b. It is computed at 12% if the gross selling price of an item. c. It is paid by producers, manufacturers, wholesalers, and retailers. d. None of the above (Nos. 14-16) On September 11, 2020 Lily Taw sold P5,000-worth of merchandise to Toto Bee on account with credit terms 2/5. n/30. Such merchandise costs P3,000- and a per agreement, the buyer can only return the defective item within 7 days after the date of sale. 14. If the sale is VAT inclusive and 60%% partial payment was received from Toto Bee on September 20, 2020, how much was withheld by Lily Taw for the tax? a. P315- b. P321.43 C. P352.80 d. P365- 15. The amount that is due for Lily Taw, net of tax for the final collection made on October 10, 2020 is? a. P1,587.17 b. P1, 785.71 c. P2,589.29 d. P2,642.86 16. How much is the total tax withheld for such sale? a. P529.29 b. P535.71 C. P599.95 d. P618.58 17. How much is the total sales net of tax? a. P4,241.07 b. P4,464.29 C. P4,552.29 d. P4,978.89 (18-20) Mr. Rodrigo a senior accountant of PS Bank with monthly compensation of $70,000. For the year 2018, he received 13" month pay equivalent to his 1 month salary and P50,000 bonus. Statutory deductions per month include: 565-P1,670; Philhealth-P333; Pag-ibig-P 100. 18. How much is the total compensation income of Mr. Rodrigo for 2018? a. P814,764- b. P840,000- C.. P890,000- d. P960,000- 19. How much is the annual statutory deductions? a. P2,103- b. P20,040- C. P24,036- d. P25,236- 20. How much is his net taxable income? a.P594,764- b. P710,000- C. P810,764- d. P844,764