Name _ _ _ _ Section _ _ Date _

Exam Reminders:

Any form of cheating will result in a score of ZERO. (e.g. leaking of exam items and answers on social media, copying from other students, using prohibited resources/cheat sheets, etc.)

Use black or blue pen only. Pencils and erasable pens are not allowed.

I.(75 points)

Read and analyze each item. Write the letter of the correct answer on the space provided. (15 items x 2 points)

1. Which of the following is the main objective of good system of internal control?

A.Increase sales.

B.Provide a means of gathering information about competitors.

C.Preventerrorsandirregularitiesinthe accounting records.

D.Prosecute employees who embezzle from the company.

2.Which of the following is another term for irregularities?

A.Errors

B.Unintentional mistakes

C.Fraud

D.Defects in internal control

3. What is the basic requirement for cash and cash equivalents?

A.Unrestricted in use for current operations

B.Available for the purchase of property, plant, and equipment

C.Set aside for the liquidation of long-term debt

D.Deposited in bank

4. Which of the following shall NOT be considered cash for financial reporting purposes?

A.Petty cash fund

B.Money orders

C.Coin and currency

D.IOUs

5. Which of the following is usually considered cash?

A.Certificate of deposit

B.Checking account

C.Money market saving certificate

D.Postdated check

6. What is compensating balance?

A.Saving account balance

B.Demand deposit account balance

C.Temporary investment serving as collateral for outstanding loan

D.Minimum deposit required to be maintained in connection with a borrowing arrangement.

7. Which of the following is NOT a cash or cash equivalents?

A.Redeemable preference shares acquired and due in 60 days

B.Commercial papers held and due for repayment in 90 days

C.Equity investments

D.A bank overdraft

8. How should bank overdraft be reported in the financial statement?

A.As a deduction from current assets

B.As a deduction from cash

C.Netted against cash and a net cash amount reported

D.As a current liability

9. Which of the following is NOT a cash and cash equivalent?

A.A three-year treasury note maturing on January 31 of the next year purchased by the entity on December 1 of the current year

B.A three-year treasury note maturing on January 31 of the next year purchased by the entity on October 1 of the current year

C.A 90-day treasury bill

D.A 60-day money market placement

10. Which of the following is NOT correct?

A.The accounting function should be separated from custodianship of assets.

B.Certain clerical personnel should be rotated among various jobs.

C.The responsibility for receiving merchandise and paying for it should be given to one (1) person.

D.Entity personnel should be given well-defined responsibilities.

11. When financial statements are prepared, the balance of Petty Cash account is:

A.Not reflected in the financial statements.

B.Reported along with other unrestricted cash items in the current asset section of the balance sheet.

C.Reported as restricted cash in the balance sheet.

D.Reported as miscellaneous expense item on the income statement.

12. Which of the following should NOT be included in the Cash option on the balance sheet?

A.Coins and currencies in the cash register

B.Checks from other parties present in the cash register

C.Amounts on deposit in checking account at the bank

D.Postage stamps on hand

13. What is the treatment of customers' postdated check?

A.Accounts receivable

B.Prepaid expenses

C.Cash

D.Accounts payable

14. Which of the following is NOT a characteristic of system of cash control?

A.Uses a voucher system

B.Combinedresponsibilityforhandlingand recording cash

Name _ _ _ _ Section _ _ Date _

C.

Daily deposit of all cash received

D.Internal audit at irregular intervals

15. What is proof of cash?

A.It is a physical count of currencies on hand at the end of reporting period.

B.It is a formal statement showing the total cash receipt during the year.

C.It is a four-column bank reconciliation showing reconciliation of cash balances per book and per bank at the beginning and end of the current month and reconciliation of cash receipts and cash disbursements of the bank and the depositor during the current month.

D.It is a summary of cash receipts and cash payments.

16. Which of the following would NOT require an adjusting entry on the depositor's books?

A.NSF check from customer

B.Check in payment of account payable by the depositor is overstated.

C.Depositor of another entity is credited by the bank to the account of the depositor.

D.Bank service charge

17. Under which classification is cash restricted for plant expansion reported?

A.Current assets

B.Noncurrent liabilities

C.Current liabilities

D.Equity

18. Which of the following should NOT be considered as cash?

A.Change fund

B.Certified check

C.Personal check

D.Postdated check

19. Which of the following is NOT a category of financial assets?

A.Financial assets at fair value through profit or loss

B.Financial assets at fair value through other comprehensive income

C.Financial assets at amortized cost

D.Financial assets held for sale

20. An entity purchased government bonds. The entity's business model in managing financial assets is achieved by collecting contractual cash flows that are solely payments of principal; and interest on the principal amount outstanding and by selling the financial assets. Which of the following is the most appropriate classification for investment in bonds?

A.Held for trading

B.At fair value though profit or loss

C.At amortized cost

D.At fair value through other comprehensive income

II.(5 items x 5 points)

Answer the following items.

Use a 10-column worksheet for the solutions.

1.The following information pertains to ABC Company on September 4, 201A:

Bank Statement balance

P

80,000

Checkbook balance

112,800

Deposit in transit

40,000

Outstanding checks

8,000

Bank service charges for September

800

Compute for the cash balance to be reported in ABC's balance sheet on September 30 201A.

2.The following information pertains to DEF Company on September 30, 201A:

Bank Statement bank

P

40,000

Deposit in transit

12,000

Outstanding checks

32,000

Bank service charges for December

800

Bank erroneously charged Nics Company's account for Nico Company's check written for 2,800. As of September 30, the bank had not corrected this error

2,800

Compute for the cash balance per ledger before adjustment in DEF's books on September 30, 201A.

3.The following data relate to the bank account of JK Company:

Cash balance, October 31 per bank

P

20,000

Cash balance, November 30 per bank

43,000

Checks paid during November by bank

11,800

Checks written during November per books

13,600

Cash balance, November 30 per books

44,400

Bank service charge for November, not recorded on books

200

Deposits per books for October

38,000

Compute for the total amount of deposits recorded by the bank for the month of November.

4.The following were the account balances of JK Company on December 31, 201A:

Cash on Hand

P

375,000

Cash in current and savings account

6,750,00

Cash set aside for plant expansion (expected for payment next accounting period)

4,800,000

Cash in current and savings accounts includes 1,800,000asholdout against short-termloan

arrangements. There are no legal restrictions as to withdrawal by JK.

Compute for the total cash to be reported in the current assets section of JK's December 31, 201A statement of financial position.

5.On December 201A, JK Company has the following information concerning its cash and cash equivalents and some other items:

Coins and currency

P

100,000

Checks received from customers

1,200,000

Certificate of deposit, term: 12 months

1,600,000

Petty cash fund

8,000

Postage stamps

1,200

Bank, A checking account balance

4,200.000

Post-dated check, customer

20,000

Money order from customer

30,000

Cash in savings account

200,000

Bank draft from customer

80,000

Utility deposit to electric company, refundable

10,000

Cash advance received from customer

16,000

NSF check, C. company

40,000

Cash advance to company executive, collectible upon demand

400,000

Bank B, checking account, overdraft

40,000

IOUs from employees

24,000

Compute for the amount of cash and cash equivalents JK Company should report in its December 31, 201A statement of financial position.