Junior Philippine Institute of Accountants

College of the Immaculate Conception

Peer Mentoring
Post- Test
Financial Accounting and Reporting

1. Which of the following is usually considered cash?

a. Certificate of deposit
b. Checking account
c. Money market saving certificate
d. Postdated check

2. All of the following may be included in “cash”, except

a. Coins and currency
b. Money market instrument
c. Checking account balance
d. Saving account balance

3. 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

4. Which of the following should not be considered “cash”?

a. Change fund
b. Certified Check
c. Personal Check
d. Postdated Check

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

a. Current Assets
b. Noncurrent Assets
c. Current Liabilities
d. Equity

6. A cash equivalent is a short-term, highly liquid investment that is readily

convertible into known amount of cash and
a. Is acceptable as a means to pay liabilities.
b. Has a current market value that is greater than the original cost.
c. Bears an interest rate that is at least equal to the prime interest rate
at the date of liquidation.
d. Is so near maturity that it presents insignificant risk of change in
interest rate.

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7. Which of the following statements in relation to an imprest petty cash is
incorrect?
a. The imprest petty cash system in effect adheres to the rule of
disbursement by check.
b. Entries are made to the petty cash account only to increase or decrease
the size of the fund or to adjust the balance if not replenish at year-
end
c. The petty cash account is debited when the fund is replenished.
d. The petty cash fund is reported as part of current assets.

8. Bank reconciliations are normally prepared on a monthly basis to identify

adjustments needed in the depositor’s records and to identify bank errors.
Adjustments on the part of the depositor should be recorded for
a. Bank errors, outstanding checks and deposits in transit.
b. All items except bank errors, outstanding checks and deposits in transit.
c. Book errors, bank errors, deposits in transit and outstanding checks.
d. Outstanding checks and deposits in transit.

9. If the balance shown in the bank statement is less than the correct cash
balance and neither the entity nor the bank has made any errors, there must
be
a. Deposit credited by the bank but not yet recorded by the entity
b. Outstanding checks
c. Deposit in transit
d. Bank charges not yet recorded by the entity

10. Rizal Corporation had the following account balances at December 31, 2018:
Cash on hand and in bank P2,500,000
Cash restricted for plant expansion on June 30, 2019 1,000,000
Time deposit 3,000,000
Savings deposit set aside for dividends payable
on June 30, 2020 500,000
The total amount to be reported as cash and cash equivalents as of December
31, 2018 is
a. 7,000,000 c.6,500,000
b. 6,000,000 d.5,500,000

11. Bonifacio Company provided the following information on December 31, 2018:

Cash on hand 500,000

Petty cash fund 20,000
BDO Current account 3,000,000
BPI Current account No. 1 400,000
BPI Current account No. 2 ( 50,000)
BSP treasury bill – 60 days 1,000,000

 The cash on hand included a customer postdated check of P100,000 and

postal money order of P40,000
 A check for P200,000 was drawn against BDO account, dated January 15,
2018, delivered to payee and recorded December 31, 2018.

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 What total amount of cash should be reported on December 31, 2018?

a. 4,970,000 c. 4,770,000
b. 6,970,000 d. 3,970,000

12. Mabini Corporation’s checkbook balance at December 31, 2018 was P50,000.
In addition, Richard held the following items in its safe on that date.

Check payable to Mabini, dated December 31, 2018 in

Payment of a sale made in December 2018, not included
in December 31, check book Balance. P20,000

Check payable to Mabini, deposited December 15 but

Returned by bank on December 30 marked “NSF”.
Only the deposit, not the return, was reflected
In the checkbook. 5,000

Check drawn on Mabini Company’s account, payable to

A vendor, dated December 30, but not yet mailed to payee
As of December 31, 2018. 3,000

The amount to be shown as cash on Mabini’s statement of financial position

at December 31, 2018 is
a. P48,000 c. P68,000
b. P65,000 d. P70,000

Use the following information for items 9 – 10

Juan Luna Company’s cash in bank items as of December 31, 2018 included the
following items:
Cash in bank – BDO Checking account P2,400,000
Cash in Bank – BPI Checking account 1,600,000

Additional information in relation to the above-mentioned components are as

follow:

 The following items were noted in relation to the BPI checking account:
 Check No. 11115 drawn on December 29, 1018 in the amount of P120,000,
which was picked up by the payee on December 31, 2018 was dated
January 2, 2019.
 Check No. 11121 drawn and dated on December 30, 2018 in the amount of
P210,000 which was picked up on December 31, 2018.
 The following information is in relation to Juan Luna Company’s BDO
checking account:
BDO checking account #10001 P2,850,000
BDO checking account #10002 (450,000)
 The overdraft in BDO checking account #10002 was due to a check for
P600,000 dated January 2, 2019 which was claimed by the payee on
December 29, 2018.
 BDO checking account #10001 includes a P200,000 compensating balance
in relation to long-term loan which was legally restricted as to
withdrawal.

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13. The correct amount to be included as Cash in Bank – BDO checking account
is
a. 2,650,000 c. 3,000,000
b. 2,800,000 d. 3,250,000

14. The correct amount to be included as cash in bank – BPI checking account
is
a. 1,510,000 c. 1,810,000
b. 1,720,000 d. 1,930,000

15. Lapu-Lapu Company reported the following items on December 31, 2018:

Bank A – demand deposit 135,000

Undeposit customers checks 52,000
Currency and coins on hand 5,800
Savings deposit – for plant expansion 4,000,000
Bank B – demand deposit 200,000
Treasury bills – 7 months maturity 300,000
Treasury bills – 2 months maturity 150,000

The demand deposit in Bank B represents a 20% compensating balance for a

P1,000,000 loan with the bank. Lapu-Lapu may not withdraw the balance until
the loan is repaid in 2021.

What is the amount of cash and cash equivalents should Lapu-Lapu report on
December 31, 2018?
a. 642,800 c. 342,800
b. 842,800 d. 542,800

16. The petty cash fund of Del Pilar Company at the end of the fiscal year
ended June 30, 2018, is composed of the following:

Coins and currency 2,000

Paid vouchers
Transportation 600
Gas 400
Office Supplies 500
Postage 300
IOU of employees 200 2,000
Employees’ check (NSF) 1,000
Check payable to petty cash
custodian 4,000
Check drawn for petty cash
replenishment 5,000

What is the amount of petty cash should be reported?

a. 2,000 c. 11,000
b. 14,000 d. 12,000

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17. The petty cash fund of Burgos Company at the end of the fiscal year ended
June 30, 2018, is composed of the following:

Currencies P 3,800
Coins 1,200
Paid vouchers:
Office supplies 1,750
Postage stamps 2,000
Loans to employees 6,000 9,750
Check drawn by the manager, returned by bank
Marked “NSF”. 2,750
Check drawn by the company, payable to the order of
The petty cash custodian, representing her salary 12,500

The amount of petty cash fund that should be shown on the statement of
financial position at June 30, 2018 of Burgos Company is
a. P5,000 c. P20,250
b. P17,500 d. P30,000

18. In preparing its august 31, 2018 bank reconciliation, Antonio Luna Company
has available the following information:

Balance per book, 8/31/18 P180,500

Deposit in transit, 8/31/18 32,500
Return of customer’s NSF checks, 8/31/18 6,000
Outstanding checks, 8/31/18 27,500
Bank service charges for August 1,000
Book error, understatement of customer’s
Check amounting to 2,000

At august 31, 2018, Antonio Luna Company’s correct cash balance is

a. 194,500 c. 175,500
b. 185,500 d. 178,500

19. The cash account of Aguinaldo on December 31, 2018 has a balance of
P151,000 and it consists of the following:

Bills and coins on hand P 52,780

Traveler’s check 22,400
Escrow deposits 6,500
Postage stamps on hand 120
Petty cash including paid cash vouchers of P1,650 2,000
Balance in Savings account with a bank closed by the BSP 36,000
Customer’s check dated January 15, 2018 8,000
Postal money order 800
IOU of a Salesperson 400
Checking account balance in the China Bank 22,000
Payroll fund 10,000
Tax fund 5,000
Purchasing fund 8,000

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The correct cash and cash equivalents balance on December 31, 2018 is

a. P121,730 c. P121,330
b. P116,330 d. P113,330

20. Silang Company assembled the following information in completing its March
bank reconciliation: balance per bank P3,820; outstanding checks P775;
deposits in transit, P1,250; NSF check P80; bank service charge P25; cash
balance per books P4,400. As a result of this reconciliation, to adjust
cash, Silang will
a. Reduce its cash account by P475.
b. Reduce its cash account by P25.
c. Increase its cash account by P55.
d. Reduce its cash account by P105.

21. In preparing its bank reconciliation for the month of April 2018, Alonzo
Inc, has available the following information:

Balance per bank statement, 4/31/18 P39,140

NSF check returned with 4/30/2018 bank statement 450
Deposits in transit, 4/31/2018 5,000
Outstanding checks, 4/30/2018 5,200
Bank service charges, 4/30/2018 20
What should be the adjusted cash balance at April 30, 2018?
a. 39,370 c. 38,490
b. 38,940 d. 38,470

22. As of June 30, 2018, the bank statement of Bayani Trading had an ending
balance of P373,612. The following data were assembled in the course of
reconciling the bank balance:
 The bank erroneously credit Bayani Trading of P2,150 on June 19.
 During the month, the bank charged NSF checks amounting to P2,340 of which
P800 had been redeposited on the 24th of June.
 Collection for June 30 totaling P10,330 was deposited the following month.
 Checks outstanding as of June 30 were P30,205.
 Notes collected by the bank for Bayani Trading were P8,150 and the
corresponding bank charges were P50.
What is the adjusted bank balance on June 30, 2014?
a. 351,587 c. 358,147
b. 353,927 d. 359,687

23. The following information relates to Tandang Sora Company’s accounts for
2018:

Accounts Receivable, Jan. 1, 2018 1,350,000

Credit Sales for 2018 3,650,000
Cash Sales for 2018 2,500,000
Sales Returns on credit sales for 2018 135,000
Collections from customers on credit sales
2,750,000
during 2018
Estimated future sales returns related to
115,000
sales on account at Dec. 31, 2018
Estimated sales discounts related to sales on
95,000
account at Dec. 31, 2018

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 What amount should Tandang Sora report for accounts receivable at December
31, 2018 statement of financial position?

a) P4,405,000 c) P1,905,000
b) P2,115,000 d) P4,615,000

24. On March 15, 2019, Plaridel Company sold on account goods with selling
price of P545,000 with terms of 5/10, 3/15, n/30. Freight costs amounted to
P5,150. The goods were received by the buyer on March 17, 2018. Plaridel
Company collected the receivable on March 30, 2019
How much net cash did Plaridel receive from the buyer if the terms are FOB
Destination, freight collect? (Round-off to the nearest peso)

a) P497,068 c) P496,250
b) P539,850 d) P523,500

25. On January 1, 2018, Laong Laan Company sells inventory with a list price of
P250,000 on account under credit terms of 15%, 20%, 3/10, n/30.

Assuming Laong Laan is using net method of discounting, how much should be
debited to Accounts Receivable on January 1, 2018?

a) P164,900 c) P242,500
b) P157,625 d) P170,000