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Assignment and Quiz 2 Accounting For Cash

The document provides information about the cash and cash equivalent accounts of Lukas Company as of December 31, 2016. It lists cash on hand, petty cash fund, bank accounts, treasury bills, and time deposits. It also provides adjustments needed for certain accounts, such as removing a post-dated check from cash on hand. It calculates the correct balances for cash on hand and petty cash fund after adjustments. Finally, it totals all cash and cash equivalent accounts to $4,965,000.

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Gab Bautro
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
587 views

Assignment and Quiz 2 Accounting For Cash

The document provides information about the cash and cash equivalent accounts of Lukas Company as of December 31, 2016. It lists cash on hand, petty cash fund, bank accounts, treasury bills, and time deposits. It also provides adjustments needed for certain accounts, such as removing a post-dated check from cash on hand. It calculates the correct balances for cash on hand and petty cash fund after adjustments. Finally, it totals all cash and cash equivalent accounts to $4,965,000.

Uploaded by

Gab Bautro
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment 002 Accounting for Cash

The December 31, 2016 trial balance of Lukas Company includes the following accounts:
 
Cash on hand 500,000
Petty cash fund 20,000
Security Bank current account 1,000,000
PNB Current account No. 1 400,000
PNB Current account No. 2 (50,000)
BSP treasury bill – 60 days 3,000,000
BPI time deposit – 30 days 2,000,000
 

 The cash on hand includes a customer postdated check of


P100,000 and postal money order of P40,000.
 The petty cash fund includes unreplenished petty cash vouchers for P2,000 and an
employee check for P3,000 dated January 31, 2010.
 A check for P200,000 was drawn against Security Bank account, dated January 15,
2017, delivered to the payee and recorded December 31, 2016.
 The BPI time deposit is set aside for acquisition of land to be used as a factory site.

1. Cash on hand

 
Cash on hand 500,000
Less: post-dated check 100,000
Correct cash on hand 400 000

2. Petty cash fund

 
Petty cash fund 20,000
Less: unreplenished petty cash vouchers 2,000
           employee check 3,000
Correct petty cash fund 15 000

3. Cash and cash equivalent

 
Cash on hand 400,000
Petty cash fund 15,000
Security Bank current account  1 200 000

PNB current account  350 000


 
BSP treasury bill - 60 days 3 000 000

Total cash and cash equivalents 4,965,000


 

Quiz 2 Accounting for Cash

Valuation of the cash account in the balance sheet.


Select one:
a. Net book value
b. Expected value
c. Net realizable value

d. Face value

Which of the following statements is false?


Select one:
a. A certified check should not be included in the outstanding checks
b. A certified check is a liability of the bank certifying it
c. A certified check is one drawn by a bank upon itself **cashiers check

d. A certified check will be accepted by many persons who would not otherwise accept a
personal check
Entries to record the replenishment of petty cash fund result in a debit to petty cash fund and a
credit to cash in bank. This accounting procedure typically exemplifies the
Select one:
a. Internal control
b. Imprest petty cash system
c. Fluctuating petty cash system

d. Administrative control

Philip Company had the following account balances on December 31, 2016
  Cash in bank-current account         5,000,000
  Cash in bank-payroll account          1,000,000
  Cash on hand                                   500,000
  Cash in bank-restricted account         
for building construction expected          
to be finished in 2003                     3,000,000
  Time Deposit purchased on          
December 15, 2016 and due on          
March 15, 2017                              2,000,000
 
 
The cash on hand includes a P200,000 check payable to Philip, dated January 15, 2017. What
amount should be reported as cash and cash equivalents on December 31, 2016? {
Select one:
a. 6,300,000
b. 8,700,000
c. 6,500,000

d. 8,300,000
SOLUTION:

Cash in bank-current account 5,000,000


Cash in bank - payroll account 1,000,000
Cash on hand (500,000 - 200,000) 300,000
Time deposit 2,000,000

8,300,000
The cash in bank set aside for payroll is included in cash because it is for the payment of current liability

What is the adjusting entry for a customer NSF check


Select one:
a. No adjustment necessary
b. Debit service charge and credit cash
c. Debit accounts receivable and credit cash

d. Debit cash and credit accounts receivable

Bank reconciliation 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_______.
Select one:
a. Bank errors, outstanding checks and deposits in transit
b. Outstanding checks and deposits in transit
c. Book errors, bank errors, deposits in transit and outstanding checks

d. All items except bank errors, outstanding checks and deposits in transit

A deficiency in cash control that may conceal cash shortage through bank-to-bank transactions.
Select one:
a. Lapping
b. Defalcation
c. Window dressing

d. Kiting

Which is not considered as a cash equivalent?


Select one:
a. A 60-day money market placement
b. A 90-day T-bill Equity
c. A three-year treasury note maturing on May 30 of the current year purchased by the entity on
January 15 of the current year

d. A three-year treasury note maturing on May 30 of the current year purchased by the entity on
April 15 of the current year

Which of the following is an appropriate reconciling item to the balance per bank in a bank
reconciliation?
Select one:
a. Bank service charge.
b. Bank interest.
c. Chargeback for NSF check.

d. Deposit in transit.
Check

Bank overdrafts should be reported in the balance sheet as part of?


Select one:
a. cash deductions.
b. current liabilities.
c. sinking funds.

d. other liabilities
Check

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