Notesale: Turn your study into money

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Which of the following pertains to the characteristics of cash and cash equivalents account?
A
...
a money set aside for the settlement of long-term debt
C
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Available for the purchase of any type of property, plant and equipment
ANSWER: C
Which of the following may form part of cash balance?
A
...
Checking Accounts
C
...
Postdated Checks
ANSWER: B
for financial reporting purposes, which of the following would not form part of cash?
A
...
Petty Cash fund and Interest fund
C
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Money Orders and Personal Checks
ANSWER: C
At the end of the current year, CPA Company has cash deposited in three different banks
...
the second account is overdrawn
...
How should these accounts
be reported?
A
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The segregated account should be reported as a non-current asset and the regular account should
be reported as part of cash, net of the overdraft
C
...
The segregated and regular accounts should be reported as part of cash, net of the overdraft
ANSWER: A
In which of the following accounts are post-dated checks received classified?
A
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Receivables
C
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Payable
ANSWER: B
Which of the following correctly describes compensating balance?
A
...
The balance of your demand deposit account
C
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Requirement of a minimum deposit in conjunction with a borrowing agreement
ANSWER: D
Which of the following is true about bank overdraft?
A
...
A debit balance in cash in bank account
C
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Classified as a current liability
ANSWER: D
Foreign bank deposits that are subject to foreign exchange restrictions should
A
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Be classified as current asset with adequate disclosure
C
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Be written off as a loss
ANSWER: C
Under which section of the balance sheet is “cash restricted for plant expansion” reported?
A
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Non-Current Assets
C
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Stockholder’s Equity
ANSWER: B
Petty Cash Fund is
A
...
Money Set Aside for payment of interest
C
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Money kept on hand for making minor disbursements of coin and currency rather than by writing
checks
ANSWER: D
Cash restricted for building expansion is
A
...
Presented under the current asset section of the statement of financial position
C
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Forms part of the entity’s appropriated retained earnings
E
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a debit to expense accounts
B
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a debit to cash on hand
D
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Cash shortage
B
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Receivable from the petty cash fund cashier
D
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Date the investment is bought
B
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Date on which the financial statements were published
D
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Three-month time deposit
B
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Equity securities held for trading which are normally sold within 30 days from the date of acquisition
D
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Bank Service Charge
B
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Deposits in Transit
D
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Erroneous Bank Credit
B
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Bank Service Charge
D
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Deposit in Transit
B
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Customer deposits credited by the bank to the company’s account
D
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a book reconciling item that is added to the book balance
B
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a bank reconciling item that is deducted from the book balance
D
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Bank service charge
B
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DAIF check from customer
D
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there must be deposits in transit
B
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Deposits credited by the bank but not yet recorded in the company books
D
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ANSWER: A
What is the possible reason if the balance shown on an entity’s bank statement is more than the correct
cash balance and neither the entity nor the bank has made any errors?
A
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Existence of Outstanding Checks
C
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Bank service charges not yet recorded in the company books
ANSWER: B
Which of the following is correct about erroneous bank credit?
A
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Cash receipts per bank is understated
C
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Cash receipts per book is understated
ANSWER: A
Which of the following is correct about erroneous bank debit?
A
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Cash receipts per bank is understated
C
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Cash Receipts per book is understated
ANSWER: B
What is the possible reason if the balance shown on an entity’s records is less than the correct cash balance
and neither the entity nor the bank has made any errors?
A
...
Existence of Outstanding Checks
C
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Bank service charges not yet recorded in the company books
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Classified as a trade receivable if collectible within 12 months from the reporting date
B
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Classified as a noncurrent nontrade receivable if collectible beyond 12 months
D
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Trade Receivables
B
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Current non-trade receivables
D
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Fair Value
B
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Fair Value less direct transactions costs
D
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Fair Value
B
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Amortized Cost using the Nominal Interest Method
D
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Interest Receivable
B
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Cash Sales
D
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Realizable Value
B
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Fair Value
D
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Gross Method
B
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Allowance Method
D
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Direct-Write-off Method
B
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Both A and B
D
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Accounts Receivable
B
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Allowance for Doubtful Accounts
D
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Percentage of Sales
B
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Aging of Accounts Receivable
D

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