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In reconciling the bank balance with the book cash balance, which of the following would not
cause the bank balance shown on the bank statement to be lower than the unadjusted book
balance?
a.
b.
c.
d.
Cash on hand at the company

NSF checks from the customer, as reported on the bank statement
Interest credited to the account by the bank
Deposit in transit
A Cash Short and Over account is

a.
b.
c.
d.
Not generally accepted

Debited when the petty cash proves out over
Debited when the petty cash fund proves out short
A contra account to cash
A bank overdraft, should be

a.
b.
c.
d.
Reported as deduction from the current asset section

Reported as deduction from cash
Netted against cash and a net cash amount reported
Reported as current liability, when there is no valid basis for offsetting against another
bank account
The statement of financial position of Money Company shows cash of 330,820. The following
items were found to comprise this total amount:
Checking account in Metrobank (outstanding checks as of year-end totaled 15,200) 105,200
Savings account at Far East Bank
30,800
Petty cash fund (including expense receipts of P250)
1,500
Cash on hand (undeposited sales receipts)
4,200
Sinking fund cash
35,000
Cash in foreign bank (in equivalent pesos)
65,000
Customers check on hand:
Travelers check
14,000
Managers check
23,120
Short term treasury bills
52,000
What is the correct amount of cash?
a.
b.
c.
d.
243,570
295,570
280,370
228,550
Queen Jonna Co. is preparing its March 31 bank reconciliation. The following data are available:
Per Bank
March data:
Balance, February 28
March deposits reflected
Per Books
P 926,750 P 899,250
595,000
612,500
March checks reflected

(771,250)* (762,500)
Note collected (including P2.500 interest)
252,500
Service charge
(1,500)
Balance, March 31
P 1,001,500 P749,250
From the February 28 bank reconciliation:
Deposit in transit P21,250
Outstanding checks P48,750
*Erroneously includes a check drawn by Queen Junna Enterprises for P18,750
The deposit in transit at March 31 is

a.
b.
c.
d.
18,750
38,750
40,000
58,750
The amount of outstanding checks at March 31 is

a.
b.
c.
d.
18,750
38,750
40,000
58,750
An arrangement which involves the sale of a note receivable with recourse to a bank is called
a.
b.
c.
d.
Factoring
Assignment
Pledging
Discounting
When specific receivables are used to collateral for a loan in such a way that the proceeds from
the collection of the receivables are used to retire the loan, the receivables have been
a.
b.
c.
d.
Discounted
Factored
Assigned
Pledged
When a company uses the allowance method of recognizing uncollectible accounts, the entry to
write off a customers account would have what effect on profit and amortized cost of accounts
receivable?
Profit
a.
b.
c.
d.
None
Decrease
Increase
Decrease
Amortized Cost of A/R

None
Decrease
Increase
None
On December 21,2013, ABC Manufacturing discounted the 60-day, 15% P800,000 note from
Customer F at National Bank. The note is dated December 1 and the banks discount rate is 18%
and the proceeds would be
a. 820,000
b. 16,400
c. 800,000
d. 803,600
Corolla, Inc. prepared an aging of its accounts receivable at Dec. 31, 2014 and determined that
the amortized cost of the receivables was 250,000. Additional information is available as follows:
Allowance for Bad Debts, 1/1/14- credit balance
P28,000
Accounts written off as uncollectible during 2014
23,000
Accounts receivable at 12/31/14
270,000
Uncollectible accounts recovery during 2014
5,000
What is Corollas bad debts expense for the year 2014?
a.
b.
c.
d.
23,000
20,000
15,000
10,000
Expedition Co. sold merchandise on credit with list price of P105,000 and a trade discount of
10%, Terms were 2/10, n/30. Which of the following entries is correct, given the indicated method
of accounting for cash discounts?
a. Gross Price Method
Accounts Receivable
Sales
b. Gross Price Method
Accounts Receivable
Sales
c. Net Price Method
Accounts Receivable
Sales
d. Net Price Method
Accounts Receivable
Sales
C
C
D
A
B
D
105,000
105,000
92,610
92,610
94,500
94,500
92,610
92,610
D
D
D
A
D
A
Biological assets are initially recognized in the books at

a.
b.
c.
d.
Purchase price
Purchase price plus transaction costs
Fair value
Fair value less estimated cost to sell
The change in fair value less estimated cost to sell of a biological asset shall be
a.
b.
c.
d.
D
B
Ignored
Taken to profit or loss during the period in which the arises
Taken to equity under the heading comprehensive income
Taken to equity until such date that the asset is disposed of, at which date, any balance in
the equity shall be taken to profit or loss.

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In reconciling the bank balance with the book cash balance, which of the following would not

Cash on hand at the company

A Cash Short and Over account is

Not generally accepted

A bank overdraft, should be

Reported as deduction from the current asset section

March checks reflected

The deposit in transit at March 31 is

The amount of outstanding checks at March 31 is

Amortized Cost of A/R

Biological assets are initially recognized in the books at

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