C & CE

Question 1

Rule to Remember in Cash

Answer 1

must be unrestricted

Question 2

Measurement of Money in a Closed / Bankrupt Bank

This is a receivable.

Answer 2

NRV

Question 3

Undelivered / Postdated / Stale Check drawn by others is part of cash. True or False?

Answer 3

False (must be drawn by entity)
- Since drawn by others → will go back to receivable

Question 4

Compensating Balance (legally restricted, in connection with a short-term borrowing) is part of cash. True or False?

Answer 4

False (X cash)
- Short Term → short-term investment
- Long Term → long-term investment

Question 5

Cash Fund (in connection with a short-term borrowing) is part of cash. True or False?

Answer 5

True (different sa compensating balance)
- Short Term → cash
- Long Term → long-term investment

Question 6

Cash Fund (for acquisition of NCA) is part of cash. True or False?

Answer 6

False
- For NCA → Always LTI, regardless of liability

Question 7

IOU from employee is part of cash. True or False?

Postage stamps is part of cash. True or False?

Cryptocurrency is part of cash. True or False?

Answer 7

False (receivable)

False (supplies)

False (not readily available for cash)

Question 8

Rule to Remember in Cash Equivalent

Answer 8

3-Month Rule (date of purchase)

Question 9

Equity Investment is part of cash equivalent. True or False?

Answer 9

False

Question 10

5 Composition of Cash Equivalent

Answer 10

• treasury bills
• time deposit
• commercial paper
• money market placement
• preference share (IF 3 month rule)

Question 11

Petty Cash Fund

ERA REVERSE

Answer 11

Establish
Expense - memo entry only
Reimburse/Replenish
Adjust at Year-End
Reverse at Beginning of next year

Question 12

Anong process lang di gumagalaw yung PCF account?

Answer 12

Replenishment
Dr. Expenses // Cr. Cash in Bank

Question 13

What is the journal entry
- upon discovery of shortage
- upon investigation of shortage

Answer 13

Discovery
- Dr. Cash Short // Cr. Cash on Hand

Investigation
- Dr. Due from Cashier or Loss // Cr. Cash Short

Question 14

Solve : Accounted For (Petty Cash)
- Cash on Hand (CROLON)
- Non Cash with AJE (VIO)

Answer 14

Cash on Hand
- Currencies
- Replenishment Check
- Other Checks (VALID)
- Less : Overage
- Less : Cash, not belong to fund (NOT INTACT)

Non Cash with AJE
- Expense Vouchers
- IOU
- Other Checks (INVALID)

Question 15

Solve : Accounted For (Undeposited Collections)
- Cash on Hand
- Non Cash with AJE

Answer 15

Cash on Hand
- Currencies
- Checks Collected (VALID)

Non Cash with AJE
- Use of Collections to pay Disbursements

Question 16

Bank Reconciliation

• How to know if shortage or overage?

BDO

Answer 16

Bank + DIT + OC = Adjusted Bank Balance

• Shortage or Overage = Basis → Bank Balance

Question 17

Outstanding Checks include certified checks. True or False?

Answer 17

False

Question 18

Heading in Proof of Cash

Answer 18

Beginning | Increase in Cash | Decrease in Cash | Ending

Question 19

How to compute Deposit in Transit, End?

Answer 19

DIT, beg
Add : Deposits (book)
Less : Deposits (bank)

deposits only, not cash receipts

Question 20

How to compute Outstanding Checks, End?

Answer 20

OC, beg
Add : Checks issued (book)
Less : Checks debited (bank)

checks only, not cash disbursements

Question 21

Assumptions in Proof of Cash
- July error, corrected in August
- August error, corrected in September

What to remember if August error, corrected in September (not yet corrected)?

Answer 21

if receipt, put to receipt column

Question 22

Special Considerations in Proof of Cash

What to remember in case
- July error, not corrected
- August error, corrected
- NSF redeposited

In august error, corrected, when is it ignored?
In NSF redeposited, when is it ignored?

Answer 22

July error, not corrected
- same operation in July / August columns

August error, corrected
- overstatement = both minus in receipt / disbursement columns
- understatement = ignore

NSF redeposited
- not recorded = both added in receipt / disbursement columns
- recorded = ignore