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CPA Company had the following cash balance on July 31, 2021:
Undeposited Coins and Currencies
40,000
Unrestricted Demand Deposits
1,660,000
Company checks written and recorded
370,000
but scheduled to be mailed on August
2, 2021
90-day time deposit (restricted)
3,000,000
In exchange for a guaranteed line of credit, CPA has agreed to maintain a minimum balance of
P150,000 in its unrestricted demand deposit
...

The compensating balance is not legally restricted as to withdrawal
...

The compensating balance is not legally restricted as to withdrawal
...

The compensating balance is not legally restricted as to withdrawal
...
In addition, the
entity held the following items in the safe on that date:
Check Payable to Marian, dated January 2,
2022 in payment of a sale, Not included in
December 31 checkbook balance
Check payable to Marian, deposited
December 15 and included in December 31
checkbook balance, but returned by bank on
December 30 stamped “NSF”
...

The compensating balance is not legally restricted as to withdrawal
...

The compensating balance is not legally restricted as to withdrawal
...

The compensating balance is not legally restricted as to withdrawal
...
The compensating balance is legally restricted as to withdrawal
...
What amount should be reported as cash and cash equivalents on December 31,
2021?
6,350,000
7,850,000

6,850,000
5,550,000
ASNWER: B
Company had the following account balances on December 31, 2021:
Petty cash fund
50,000
Cash on hand
500,000
Cash in bank – current account/checking account
4,000,000
Cash in bank – payroll
1,000,000
Cash in bank – restricted account for plant addition expected to be disbursed
500,000
in 2022
Cash in sinking fund set aside for bonds payable due June 30, 2022
2,000,000
The petty cash fund included unreplenished December 2021 petty cash expense vouchers of P5,000
and employee IOU of P5,000
...
In exchange for a guaranteed line of credit the entity has agreed to maintain a
minimum balance of P200,000 in the unrestricted current bank account
...
000
6,000
9,000
ANSWER: C
CPA Company had the following account balances at December 31, 2021:
Cash in bank
3,500,000
Cash on hand
600,000
Time deposits
1,000,000
Cash as bond sinking fund due June 30, 2022
2,000,000
Cash legally restricted for additions to plant (expected to be disbursed in
1,500,000
2022)
Cash as preferred stock redemption fund (redemption date October 31, 2022)
3,000,000
Cash in bank includes P1,000,000 of compensating balance against short-term borrowing
arrangement
...
In the
current assets section of the December 31, 2021 balance sheet, total cash should be reported at
5,100,000
8,600,000
7,100,000

10,100,000
ANSWER: C
In preparing the bank reconciliation for the month of December, Case Company provided the following
data:
Balance per bank statement
3,800,000
Deposit in transit
520,000
Amount erroneously credited by bank to Case’s account
40,000
Bank service charge for December
5,000
NSF check
50,000
Outstanding checks
675,000
What is the adjusted cash in bank?
3,685,000
3,645,000
3,600,000
3,605,000
ANSWER: D
In preparing the bank reconciliation for the month of December, Case Company provided the following
data:
Balance per bank statement
3,800,000
Deposit in transit
520,000
Amount erroneously credited by bank to Case’s account
40,000
Bank service charge for December
5,000
NSF check
50,000
Outstanding checks
675,000
What is the unadjusted cash in bank balance per book?
3,550,000
3,660,000
3,610,000
3,655,000
ANSWER: B
The December 31, 2008 trial balance of CPA Co
...
1 – BDO
Checking account balance no
...
An analysis of each account shows the following details:
Undeposited collections
Cash in bank-Citibank checking account
Cash in bank- Metrobank (overdraft)
Undeposited NSF check received from a customer,dated December 15, 2007
Undeposited check from a customer, dated January 3, 2008
Cash in bank-Security Bank (fund for payroll)
Cash in bank- BPI Family Savings Bank (savings deposit)
Cash in bank- PCIB (money market instrument, 90 days)
Cash in foreign bank (restricted)
IOU’s from officers
Sinking fund cash
Treasury bills
Listed stock held as temporary investment

120,000
2,000,000
(50,000)
20,000
50,000
200,000
600,000
800,000
100,000
30,000
400,000
250,000
180,000
4,700,000

What is the correct amount of cash and cash equivalents to shown by Twist in its December
31, 2007 balance sheet?
3,920,000
3,670,000
3,970,000
3,720,000
ANSWER: C
CPA Company reported checkbook balance on December 31, 2016 at P4,000,000
...
This check was redeposited on December
26, 2016 and cleared two days later
A P400,000 check payable to supplier dated and recorded on December 30 2016 was mailed on
January 16, 2017
...
the bank statement shows a
collection by the bank of 3,200 and a customer’s check for P4,157 was returned because it was NSF
...
what is the correct cash balance?
522,403
523,253
532,403
523,353
ANSWER: A
On December 31, 2021, the petty cash fund of CPA Company with a general ledger balance of P10,000
comprises the following:
Coins and Currencies
1,800

Petty Cash Vouchers:
2,000
Gas and Delivery
Medical supplies
1,360
3,360
Advances to Employees
1,480
A sheet of paper with names of several employees together with
1,600
contribution to bereaved employee, attached is a currency of
An envelope with a stated note “birthday contributions for an
100
employee, P100”
...
The envelope was left opened with no currencies
inside
Checks Drawn to the order of the petty cash custodian
2,000
How much is cash shortage or overage?
1,360 shortage
1,360 overage
1,460 shortage
1,460 overage
ANSWER: C
On December 31, 2021, Petty Cash Fund of CPA Company 25,000
Coins and Currencies
Paid Vouchers:
Transportation
Gasoline
Office Supplies
Postage Stamps
Due from employees
Manager’s Check returned by bank marked “NSF”
Check drawn by the entity to the order of petty cash custodian
what is the amount correct amount of cash?
20,000
14,000
12,000
18,000
ANSWER: B
On December 31, 2021, Petty Cash Fund of CPA Company 25,000
Coins and Currencies
Paid Vouchers:
Transportation
Gasoline
Office Supplies
Postage Stamps
Due from employees
Manager’s Check returned by bank marked “NSF”
Check drawn by the entity to the order of petty cash custodian
what is the amount correct amount of cash?
2,000 Shortage
3,000 Shortage
4,000 Shortage
5,000 Shortage
ANSWER: B

7,600
1,200
800
1,000
600
2,400

6,000
2,000
6,400

7,600
1,200
800
1,000
600
2,400

6,000
2,000
6,400

in preparing the bank reconciliation for the month of August, CPA Company provided the following
information:
Balance per bank statement
1,805,000
Deposit in Transit
325,000
Return of Customer check for insufficient fund
60,000
Outstanding Checks
275,000
Bank Service Charge
10,000
what amount should be reported as adjusted balance per bank?
1,855,000
1,795,000
1,785,000
1,755,000
ANSWER: A
in preparing the bank reconciliation for the month of August, CPA Company provided the following
information:
Balance per bank statement
1,805,000
Deposit in Transit
325,000
Return of Customer check for insufficient fund
60,000
Outstanding Checks
275,000
Bank Service Charge
10,000
what amount should be reported as adjusted balance per book?
1,855,000
1,795,000
1,785,000
cannot be determined
ANSWER: A
in preparing the bank reconciliation for the month of August, CPA Company provided the following
information:
Balance per bank statement
1,805,000
Deposit in Transit
325,000
Return of Customer check for insufficient fund
60,000
Outstanding Checks
275,000
Bank Service Charge
10,000
what amount should be reported as unadjusted balance per book
1,855,000
1,795,000
1,785,000
1,785,000
ANSWER: D
In preparing the bank reconciliation for the month of December, CPA Company provided the following
data:
Balance per bank statement
3,800,000
Deposit in Transit
520,000
Amount erroneously debited by bank to CPA’s
40,000
account
Undeposited Check found in the company’s
5,000
drawer
NSF Check
50,000
Outstanding Checks
675,000
what amount should be reported as adjusted cash in bank?
3,685,000
3,645,000
3,600,000
3,605,000
ANSWER: A
In preparing the bank reconciliation for the month of December, CPA Company provided the following
data:
Balance per bank statement
3,800,000
Deposit in Transit
520,000
Amount erroneously debited by bank to CPA’s
40,000
account
Undeposited Check found in the company’s
5,000
drawer
NSF Check
50,000
Outstanding Checks
675,000

what amount should be reported as adjusted cash in bank?
3,735,000
3,695,000
3,650,000
3,655,000
ANSWER: A
at year end, CPA Company reported cash an cash equivalent which comprised the following
Cash on Hand
500,000
Demand Deposit
4,000,000
Certificate of Deposit
2,000,000
Postdated Customer Check
300,000
Petty Cash Fund
50,000
Traveler’s Check
200,000
Manager’s Check
100,000
Money Order
150,000
what total amount should be reported as “cash” at year end?
7,000,000
4,800,000
6,800,000
5,800,000
ANSWER; D
at year end, CPA Company reported cash an cash equivalent which comprised the following
Cash on Hand
500,000
Demand Deposit
4,000,000
Certificate of Deposit
2,000,000
Postdated Customer Check
300,000
Petty Cash Fund
50,000
Traveler’s Check
200,000
Manager’s Check
100,000
Money Order
150,000
what total amount should be reported as “cash and cash equivalent” at year end?
7,000,000
4,800,000
6,800,000
5,800,000
ANSWER; C
CPA Company had the following account balances at year-end:
Cash in Bank
2,250,000
Cash on Hand
125,000
Cash restricted for addition to office
1,600,000
supplies and expected to be disbursed
next year
Cash in Bank included 600,000 of compensating balance against short-term borrowing
arrangement
...
what total
amount of cash should be reported under current assets at year-end?
1,775,000
2,250,000
2,375,000
3,975,000
ANSWER: D
CPA Company had the following account balances at year-end:
Cash in Bank
2,250,000
Cash on Hand
125,000
Cash restricted for addition to plant
1,600,000
expansion and expected to be disbursed
next year
Cash in Bank included 600,000 of compensating balance against short-term borrowing
arrangement
...
what total
amount of cash should be reported under current assets at year-end?
1,775,000
2,250,000
2,375,000
3,975,000
ANSWER: A



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