Sample Questions

SAMPLE QUESTIONS
-It is the sorting of assets, liabilities, equity, income and expenses with similar characteristics.
Summarization
Classification
Recognition
Interpretation
-Which of the following is not an enhancing qualitative characteristic?
Faithful Representation
Understandability
Comparability
Timeliness
-A Conceptual Framework should
Guide multinational entities in developing generally accepted auditing standards
Eliminate alternative accounting principles.
Lead uniformity of financial statements.
Define the basic objectives, terms and concepts of accounting.
-What is the primary distinction between revenue and gain?
The likelihood that the transaction will recur
The nature of the activity that gives rise to the transaction
The materiality of the amount
The method of disclosing the transaction
-It is the present ability to direct the use of an economic resource and obtain the benefit that
may flow from it.
Legal right
Obligation
Control
-A decrease in an asset arising from peripheral or incidental transaction is called
Capital Expenditure
Cost
Loss
Expense Ownership
-An example of direct matching of an expense with revenue would be
Office Salaries Expense
Direct labor costs incurred to produce inventory sold during a period
Depreciation Expense
Advertising Expense
-When there is agreement between a measure or description and the phenomenon it purports
to represent, the information possesses which characteristic?
Free from Error
Completeness
Neutrality
-The underlying theme of the Conceptual Framework is
Understandability
Comparability
Decision usefulness
Timeliness
-For information to be useful, the linkage between the users and decisions made is
Verifiability
Relevance
Understandability
-Small expenditures for tools are expensed immediately.
Immediate Recognition
-When in doubt, recognize all losses and don’t recognize gains.
Conservatism
-It is the goal achieved by consistency.
Compatability
-There are no errors or omissions in the description of the phenomenon.
Free from Error
-The description and numbers or figures must match what really existed or happened.
-Generally, revenue is recognized at the point of sale.
True
-The overall objective of financial reporting is to provide information that is useful for decision making.
True
-In case where there is conflict, the Conceptual Framework shall prevail over the requirements of the International Financial
Reporting Standards.
False
-Income is an increase in asset or a decrease in liability that results in increase in equity other than contribution from equity
holders
True
-Obligation is a duty or responsibility that an entity has no practical ability to avoid.
True
-Which of the following statements is not normally an objective of financial reporting?
To provide information that is useful in assessing an entity’s sources and uses of cash.
To provide information about an entity’s liquidation value.
To provide information about an entity’s assets and claims against those assets.
To provide information that is useful in lending and investing decisions.
-Which of the following is a fundamental quality of useful accounting information?
Faithful representation
Conservatism
Consistency
Comparability
-Which of the following is not a benefit associated with the Conceptual Framework?
A conceptual framework should increase financial statement users' understanding and confidence in
Practical problems should be more quickly solvable by reference to an existing conceptual framework.
Business entities will need far less assistance from accountants because the financial reporting process will be quite
easy to apply.
A coherent set of accounting standards and rules should result.
-Which basic assumption may not be followed when a firm in bankruptcy reports financial results?
Monetary unit assumption
Going concern assumption
Periodicity assumption
Economic entity assumption
-In the event of conflict between the economic substance of a transaction and its legal form, the economic substance shall
prevail. This concept is known as
Faithful representation
Completeness
Substance over form
Form over substance
-The entity sold appliances with 2-year warranty during the current period and recognized the related warranty expense and
liability. This transaction is an example of expense recognition based on:
Immediate recognition
Systematic and rational allocation

Cause and effect association
Discretionary and arbitrary allocation
-The financial accounting information is directed toward the common needs of users and is independent of presumptions about
particular needs and desires of specific users.
Relevance
Verifiability
Neutrality
Completeness
-The current cost basis of accounting is strictly required under
Both the physical and financial capital concepts
The physical capital concept
The financial capital concept
Neither the physical nor financial capital concept.
-What is the authoritative status of the Framework?
If there is a Standard or Interpretation that specifically applies to a transaction, it overrides the Framework. In the
absence of a Standard or an Interpretation that specifically applies, the Framework should be followed.
If there is a standard or Interpretation that specifically applies to a transaction, it overrides the Framework. In the
absence of a Standard or an Interpretation that specifically applies to a transaction, management should consider the
applicability of the Framework in developing and applying an accounting policy that results in information that is relevant and
reliable.
It has the highest level of authority. In case of a conflict between the Framework and a Standard or Interpretation,
the Framework overrides the Standard or Interpretation.
The Framework applies only when PASB develops new or revised Standards. An entity is never required to consider
the Framework.
-For the next eight questions:
The following are the adjusted accounts of Sandara Park <3 Company as of December 31, 2018:
accounts payable 775,250 goods in process 886,000
Accounts Receivable 1,284,700 income tax payable 110,750
accrued expenses 188,275 investment in associate 2,215,000
accrued interest on note payable 33,225 land 3,322,500
accrued interest on trade N/R 22,150 long- term advances to officer 177,200
acc. dep.- building 4,208,500 long- term refundable deposit 44,300
acc. dep.- furniture and fixture 332,250 machinery and equipment 2,215,000
acc. dep.- machinery and equipment 775,250 manufacturing supplies 110,750
advances to employees, current 66,450 note payable- due 7/1/ 2020 1,329,000
Allowance for doubtful accounts 44,300 note payable- short- term debt 886,000
bonds- payable- noncurrent 3,987,000 notes payable 332,250
building 9,967,500 notes receivable, trade 221,500
Cash Equivalent 332,250 patent 1,107,500
Cash in bank 664,500 Petty cash fund 22,150
Cash on hand 88,600 plant expansion fund 4,430,000
cash surrender value 221,500 prepaid insurance 44,300
current portion of bonds payable 443,000 raw materials 332,250
deferred tax liability 221,500 retained earnings 8,084,750
dividends payable 221,500 retained earnings appropriated 2,215,000
financial asset at amortized cost 6,645,000 share capital, P 100 par 11,075,000
financial assets at fair value 443,000 share premium 4,430,000
finished goods 664,500 trademark 3,322,500
furniture and fixtures 886,000 Warranty liability 110,750
Office supplies 66,450
-Analyze the following statements:
I - Total Shareholders’ Equity is P 25,804,750.00.
II - Total Property, Plant and Equipment, Net is P 4,540,750.00.
Given these statements, you can conclude that:
Only I is false.
All statements are false.
Only I is true.
All statements are true.
I - Total Assets is P 34,443,250.00.
II - Total Current Liabilities is P 4,319,250.00.
Only I is true.
Only I is false.

I - Total Inventories is P 1,882,750.00.
II - Total Current Assets is P 5,249,550.00.
Only I is false.
Only I is true.
I - Total Cash and Cash Equivalents is P 1,107,500.00.
II - Total Trade and Other Receivables is P 1,550,500.00.
Only I is false.
Only I is true.
I – Working Capital (CA – CL) amounts to P 1,110,300.
II – P 9,856,750 is the total liabilities balance.
Only I is false.
Only I is true.
I – Total Reserves amount to P 6,645,000.
II – Total Depreciation amounts to P 5,316,000.
Only I is false.
Only I is true.

I – Total intangible assets amount to P 4,651,500.
II – Total property, plant and equipment, Gross is P 16,391,000.
Only I is true.
Only I is false.
I - Total Non- Current Liabilities is P 5,537,500.
II - Total Non- Current Assets is P 29,348,750.
Only I is false.
Only I is true.
-Which of the following is true about qualitative characteristics?
I- Are considered either fundamental or enhancing.
II- Contribute to the decision-usefulness of financial information.
III-Distinguish better information from inferior information for decision-making purposes.
I, II and III
I and II only
I and III only
I only
-What is the constraint that limits the information provided by financial reporting?
Timeliness
Materiality
Cost.
Comparability
-Changing the method of inventory valuation should be reported in the financial statements under what qualitative
characteristic of accounting information?
Comparability
Timeliness
Verifiability
Understandability
-Which of the following satisfy the definition of expenses:
Cash withdrawal by owner.
Payment of salaries to employees.
Purchase of equipment.
Payment of dividends to shareholders.
-Which of the following is an internal user of a company's financial information?
A member of the board of directors
A member of the family of an incorporator
A holder of a company's bond
A holder of a company's stock
-To have faithful representation, information must be all of the following, except
Confirmatory
Neutral
Complete
Free from error
-This accounting concept justifies the usage of accruals and deferrals.
Consistency
Going concern
Materiality
Stable monetary unit
-An enhancing qualitative characteristic is
Timeliness
Predictive value
Free from error
Value
-The primary focus of financial accounting has been on meeting the needs of which of the following groups?
National and local taxing authorities
Present and potential creditors of an entity
Independent auditors.
Managers of an entity

I – Preparation of trial balance is usually found on the classifying aspect of accounting.
II – Philippine Financial Reporting Standards are replaced by International Financial Reporting Standards as provided by FRSC.
III – The process of establishing Conceptual Framework involves gathering opinion of different CPAs and other parties directly
and indirectly affected.
Based on these statements, you cannot conclude that:
I and II are false.
III is true.
I is false.
I – One of the purposes of accounting standards is to identify proper accounting practices for preparation of financial
statements.
II – Accounting in private practice involves assisting the management in planning and controlling the entity’s operations.
III – Recording takes place after transactions have been identified and measured.
Only two of the statements above are true.
I is true.
II is true.
III is true.
I – PFRS international counterpart is IFRS.
II – GAAP can vary from one country to another.
III – Accounting is both an art and a science.
Based on these statements, you can conclude that:
Only II and III are true.
Only I and II are true.
I – Financial Reporting Standards Council is composed of 15 individuals from various sectors.
II – SFAS were the original GAAP observed in the Philippines before globalization arises.
III – Accounting in public practice involves individual practitioners, small firms and large multinational organizations.
Only III is true.
II and III are not false.

Not all statements are true.
Only I is false.
I – One example of internal transaction is damages incurred from natural disaster.
II – The body solely responsible in implementing RA 9298 is Board of Accountancy.
III – Management advisory services can be performed by any profession/expert needed by an entity.
III is false.
III is true.
Only I and II are true.
-HIKAB PA Corp. provided the following for the current year:
Inventory, January 1 2,000,000
Purchases 7,500,000
Purchase returns and allowances 500,000
Sales return and allowances 750,000
Inventory on December 31 2,800,000
Gross profit rate on net sales 20% (Gross Profit/Net Sales)
What is the amount of gross sales for the current year?
7.75M
9.125M
7M
8.5M
I – Measuring is considered the technical component of accounting because it segregates transactions depending on what
measurement base is to be applied on each group of transactions.
II – RA 9928 provides the rules and regulations set to be followed and governed the accountancy profession in the Philippines.
III – The focus of practice in government is the administration and custody of private funds.
III is false.
Only II is false.
Majority of the statements are true.

I – One of the factors considered by ASC in adopting international standards is increasing internationalization of business.
II – Making users and preparers of financial statements observe the same rules and regulations in accomplishing accounting
reports is a purpose of accounting standards.
III – One of the services an accountant practicing in public profession involves taxation.
Majority of the statements are false.
Majority of the statements are true.
I – DBM sends a representative to be part of FRSC.
II – The predecessor of ASC is FRSC.
III – PAS includes both PAS and PFRS.
Only II and III are false.
Only I and II are false.
Only one of the statements above is true.
All statements are not false.
I - Communicating is considered as the formal component because this is the point where the company relays to users the
proceed accounting information.
II - Among the services a CPA in public practice can render, audit is considered to be exclusive to the profession. This pertains to
an independent examination of financial statements with a purpose of identifying mistakes in the process.
III - For as long as a CPA teaches accounting subjects, he/she is identified to be in the practice of academe or education.
III is not false.
Only I is true.
Not all statements are false.
-The following are the OCI accounts of ABC Company recognized in statement of financial performance:
Unrealized Equity Gain – OCI 90,000
Unrealized Debt Loss – OCI 20,000
Translation Gain 45,000
Revaluation Surplus 112,000
Hedging Gain 10,000

Re-measurement Loss 18,000
Unrealized Loss- Credit Risk – OCI 3,000
Given this, which of the following choices is true?
Re-measurement Loss and Hedging Gain are both OCI items which cannot be reclassified.
OCI which cannot be reclassified amounted to P 223,000 net gain.
Both unrealized equity gain – OCI and unrealized debt lost – OCI can be reclassified.
OCI which can be reclassified amounted to P 35,000 net gain.
-READY GAME Company provided the following adjusted account balances on December 31, 2019:
Wages payable 250,000
Sinking fund 500,000
Cash 200,000
Short-term Investment 300,000
Mortgage payable 1,500,000
Investment in associate 2,000,000
Dividends payable 150,000
Taxes payable 220,000
Prepaid rent 100,000
Accounts payable 240,000
Inventory 800,000
Accounts receivable 350,000
What total amount should be reported as current assets on December 31, 2019?
1,750,000
3,750,000
4,250,000
2,250,000
-The following are the OCI accounts of ABC Company recognized in statement of financial performance:
Unrealized Equity Gain – OCI 90,000
Unrealized Debt Loss – OCI 20,000
Translation Gain 45,000
Revaluation Surplus 112,000
Hedging Gain 10,000
Re-measurement Loss 18,000
Unrealized Loss- Credit Risk – OCI 3,000
Given this, which of the following choices is true?

OCI gains which can be reclassified amounted to P 145,000.
OCI which can be reclassified amounted to P 75,000 net gain.
OCI loss which cannot be reclassified amounted to P 41,000.
OCI which cannot be re-classified amounted to P 181,000 net gain.
I – On a simplest sense, accounting’s purpose is to be able to help in decision making.
II – FRSC is created by BOA upon recommendation of PRC.
III – IASB standard- setting process involves exposure draft.
Only III is true.
III is not false.
I is true.
-For the next five questions:
The accounts and balances shown below were gathered from Clown Company’s trial balance on December 31, 2018. All
adjusting entries have been made.
Property, Plant and Equipment, P500,000; Biological Assets, P200,000; Goodwill, P300,000; Intangible Assets, P150,000;
Investment Property, P200,000; Investment in Associates, P200,000; Available for sale investments, P100,000; Inventories,
P200,000; Trade and Other Receivables, P300,000; Financial Assets at Fair Value through Profit or Loss, P150,000; Cash and cash
equivalents, P100,000; Share Capital, P800,000; Other reserves, P300,000; Retained Profits, P500,000; Long-Term Borrowings,
P200,000; Deferred Tax liability, P50,000; Long-Term Provisions, P100,000; Trade and other Payables, P200,000; short term
borrowings, P50,000; Current portion of long-term borrowings, P30,000; Current Tax Payable, P150,000 and short-term
provisions, P20,000.
-How much should be the amount of the current assets on Clown’s December 31, 2018 balance sheet?
600,000
750,000
650,000
700,000
-How much should be the amount of the current liabilities, to be reported in the December 31, 2018 balance sheet of Clown
Company?
470,000
450,000
420,000
430,000
-How much should be shown as total noncurrent liability as of December 31, 2018 at Clown’s statement of Financial Position?
P 250,000
P 200,000
P 350,000
P 370,000
-How much should be reported as total noncurrent assets to be reported in the balance sheet of Clown Company as of
December 31, 2018?
P 1,450,000
P 1,550,000
P 1,400,000
P 1,650,000
-How much should be reported as total equity and liabilities of Clown Company as of December 31, 2018?
P 2,300,000
P 2,250,000
P 2,000,000
P 2,400,000
-For the next seven questions:
The following are the adjusted accounts of Andrea Torres <3 Company as of December 31, 2018:
freight in 1,117,350
delivery expense 931,125
gain from expropriation 1,862,250
doubtful accounts 148,980
Gross Sales 34,637,850
depreciation- office equipment 335,205
income tax expense 2,160,210
casualty loss from earthquake 633,165
inventory, 1/1 5,586,750
bonuses 372,450
inventory, 12/31 7,449,000
purchase return and allowance 558,675
office salaries 2,420,925
Gain from discontinued operations 186,225
Purchases 22,347,000
Interest expense on bank loan 186,225

sales salaries 2,234,700
loss on sale of investment 111,735
Share in net income of associate 1,862,250
OCI- Equity investment unrealized gain- OCI 223,470
sales discount 744,900
OCI- hedging gain 74,490
Sales commission 670,410
OCI- translation loss 148,980
Advertising 372,450
office supplies expense 260,715
purchase discount 931,12
depreciation- store equipment 558,675
OCI- revaluation surplus 558,675
sales return and allowance 372,450
interest revenue 670,410
SSS and PhilHealth- office 111,735
rent revenue 372,450
SSS and PhilHealth- Sales 74,490
dividend revenue 446,940
store supplies expense 186,225
taxes and licenses 74,490
interest expense on bonds payable 558,675
- Analyze the following statements:
I – Under natural presentation, net cost of purchases is P 21,974,500.
II – Under natural presentation, supplies expense is P 446,940.
Only I is false.
Only I is true.
I – Under function presentation, Net Sales is P 33,520,500.00.
II – Under function presentation, Cost of Goods Sold is P 18,994,950.00.

All statements are false
Only I is true.
Only I is false.
I – Under functional presentation, Total Operating Expenses (excluding interest expense) is P 9,497,475.00.
II – Finance Cost is P 744,900.00.
Only I is false.
Only I is true.
Analyze the following statements:
I – Income from Continuing Operation is P 6,219,915.00.
II – Under natural presentation, Increase in inventory is P 1,862,250.
Only I is false.
Only I is true.
I – Under function presentation, Administrative Expenses is P 4,357,665.00
II – Under function presentation, Other Expenses is P 111,735.00.
Only I is false.
Only I is true.
I – Under function presentation, Gross Profit is P 14,525,550.00.
II – Under function presentation, Selling Expenses is P 4,357,665.00.

Only I is true.
Only I is false.
I – Under natural presentation, Total Income is P 38,743,800.
II – Under natural presentation, salaries and employee benefit cost is P 5,214,300.
Only I is false.
Only I is true.
-In a statement of comprehensive income showing expenses according to their function, which of the following is included in
the line item “Distribution costs” or “Selling costs?”
Advertising expense
Insurance expense
Legal and accounting fees
Freight-in
-A liability shall be classified as current when it satisfies any of the following criteria, except
it is expected to be settled in the entity’s normal operating cycle
it is held primarily for the purpose of being traded
it is due to be settled within twelve months after the balance sheet date
the entity has an unconditional right to defer settlement of the liability for at least twelve months after the balance
sheet date.
-In a statement of comprehensive income showing expenses according to their function, which of the following is included in
the line item “Administrative expenses?”
Freight-out
Cost of sales
Legal and accounting fees
Salaries of sales personnel
-In the extremely rare circumstances in which management concludes that compliance with a requirement in a Standard or an
Interpretation would be so misleading that it would conflict with the objective of financial statements set out in the Framework,
the entity shall depart from that requirement in the manner set under PAS
1. When an entity departs from a requirement of a Standard or an Interpretation, it shall disclose: (choose the incorrect
statement)
that it has complied with applicable Standards and Interpretations, except that it has departed from a particular
requirement to achieve a fair presentation;
that it has complied with other applicable standards other than those issued by FRSC or IASB and the description of
those accounting standards which the entity has complied to.
the title of the Standard or Interpretation from which the entity has departed, the nature of the departure, including
the treatment that the Standard or Interpretation would require, the reason why that treatment would be so misleading in the
circumstances that it would conflict with the objective of financial statements set out in the Framework, and the treatment
adopted; and
that management has concluded that the financial statements present fairly the entity’s financial position, financial
performance and cash flows;
-If an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the balance
sheet date under an existing loan facility, it classifies the obligation as non-current,
both even if the original term was for a period longer than twelve months AND even if an agreement to refinance, or
to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are
authorized for issue
even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting
period and before the financial statements are authorized for issue
even if it would otherwise be due within a shorter period.
even if the original term was for a period longer than twelve months
-Under this presentation method, expenses are presented in the statement of comprehensive income without distinctions as to
their functions within the entity.
two-statement presentation
nature of expense method
single-statement presentation
function of expense method
-Daniel is the owner and manager of Guidotti Landscaping Services. Daniel purchased a new station wagon for personal use and
a dump truck to be used in the business. Which of the following assumptions, principles, or constraints would be violated if
both station wagon and dump truck are recorded as assets of the business?
Continuity assumption
Separate entity assumption
Materiality concept
Prudence concept
-The objective of PAS 1 Presentation of Financial Statements is
to provide the basic principles in the presentation of general and special purpose financial statements to improve
comparability.
all of these
to provide the basic principles in the presentation of general purpose financial statements to improve comparability.
to provide the basic principles in the presentation of general purpose financial statements to improve consistency.
-Which of the following are underlying assumptions of financial statements?
Accrual basis and going concern
Prudence and conservatism
Relevance and reliability

Financial capital maintenance and physical capital maintenance
-Which basic assumption is illustrated when an entity reports financial results on an annual basis?
Going concern assumption
Monetary unit assumption
Periodicity assumption
Economic entity assumption
-Which of the following statements best describes the term “going concern”
The ability of the entity to continue in operation for the foreseeable future.
The potential to contribute to the flow of cash and cash equivalents to the entity.
The expenses of an entity exceed its income.
When current liabilities of an entity exceed current assets.
-Which of the following is considered revenue?
gain on sale of equipment
other comprehensive income
other income
service fees
-It is an entity-specific aspect of relevance based on the nature or magnitude, or both, of the items to which the information
relates in the context of an individual entity’s financial report.
Timeliness
Confirmatory value
Predictive value
Materiality
-If there is undue delay in reporting financial information, then it may lose its
Objectivity
Conservatism
Relevance
Reliability
-Comparability of financial information should pertain to
All the contents of the published annual report of an entity
Qualitative information in the notes to financial statements
Quantitative and qualitative information on the face of the financial statements and in the notes
Quantitative information on the face of the financial statements only.
-According to PAS 1, an asset shall be classified as current when it satisfies any of the following criteria, except
it is expected to be realized within twelve months after the balance sheet date
it is expected to be realized in, or is intended for sale or consumption in, the entity’s normal operating cycle
it is held primarily for the purpose of being traded
it is cash or a cash equivalent that is restricted
-Which of the following statements is incorrect about financial capital concept:
Capital is calculated as total assets less total liabilities.
The general price level accounting system follows financial capital concept.
Capital is determined as the purchasing power of equity recorded.
Profit is earned after an entity’s capital is sufficient to maintain the operating capability of the entity’s assets.
-Under the indirect method, the cash flow from operating activities is determined by adjusting the reported profit by (choose
the incorrect statement)
adding back increases in operating assets
adding back decreases in operating assets
adding back non-cash expenses
deducting decreases in operating liabilities
Question 1
The following pertains to Mine Company on December 31, 2002:
Bank statement balance P5,000,000
Checkbook balance 5,600,000
Deposit in transit 2,000,000
Outstanding checks, including P100,000 certified check 500,000
In Mine’s December 31, 2002 balance sheet, cash should be reported at:
6,600,000
7,200,000
7,100,000
6,500,000

Question 2
The books of Manila’s Service, Inc. disclosed a cash balance of 687,570 on December 31, 2010. The bank statement as of
December 31 showed a balance of 547,800. Addt’l Information that might be useful in reconciling the two balances follows:
Check number 748 for 30,000 was originally recorded on the books as 45,000.
A customer’s note dated September 25 was discounted on October 12. The note was dishonored on December 29 (maturity
date). The bank charged Manila’s account for 142,650, including a protest fee of 2,650.
The deposit of December 24 was recorded on the books as 28,950, but it was actually a deposit of 27,000.
Outstanding checks totaled 98,850 as of December 31.
There were bank service charges for December of 2,100 not yet recorded on the books.
Manila’s account had been charged on December 26 for a customer’s NSF check for 12,960.
Manila properly deposited 6,000 on December 3 that was not recorded by the bank.
Receipts of December 31 for 134, 250 were recorded by the bank on January 2.
A bank memo stated that a customer’s note for 45,000 and interest of 1,650 had been collected on December 27, and the bank
charged a 360 collection fee.

Net adjusted to cash as of December 31, 2010 amounts to?

110,370
104,370
175,170
98,370

Question 3
Expenses paid out of the petty cash is USUALLY recorded under imprest fund and fluctuating fund systems of accounting for
petty cash, respectively:

when replenished; when replenished
when replenished; when paid
when paid; when paid
when paid; when replenished
Question 4
Blue Company has the following cash balances at December 31, 2002:
Undeposited coins and curency - 35,000
Unrestricted demand deposits - 1,450,000
Company checks written (and deducted from the demand deposits amount) scheduled to be delivered five days before January
3, 2003 - 180,000
Time deposits restricted for use (expected use in 2004) - 3,000,000
The unrestricted demand deposits included P150,000 compensating balance but not legally restricted as to withdrawal. How
much should Blue report as cash in its December 31, 2002 balance sheet?

1,305,000
None of the choices
1,155,000
1,665,000

Question 5
Apache Company provides the following information for the purpose of reconciling the cash balance per book with balance per
bank statement on December 31, 2001.
The bank statement showed a balance of P200,000 on December 31.
Outstanding checks as of December 31 amounted to P50,000, including a P10,000 certified check.
Deposit in transit on December 31 was P20,000.
During December, the bank charged back NSF checks of P15,000, of which P5,000 had been redeposited and cleared by
December 27.
On December 23, the bank erroneously credited the account of Apache for P30,000 representing proceeds of loan granted to
another company.
During December, the proceeds from notes collected by the bank for Apache amounted to P75,000, net of service charge of
P2,000.
What is the cash balance per Apache Company’s ledger on December 31, 2001?

200,000
150,000
180,000
85,000

Question 6
The following statements relate to the petty cash fund. Which statement is not true?

At any time, the difference of the cash in the petty cash fund and the total petty cash vouchers should equal the
amount for which the imprest petty cash fund was established.
Entries to record the replenishment of the imprest petty cash fund result in debit to various expense accounts and a
credit to the cash in bank.
The amount of coins and currency in the petty cash fund is not the same before the fund is reimbursed as it is
afterwards.
Under the imprest petty cash system, it is necessary to adjust unreplenished petty cash expenses at end of the year.

Question 7
The accountant for the Muntilupa company assembled the ff data:

Cash acct balance, 6/30 - 15,822
Deposit in transit, 6/30 - 8,201
Outstanding checks, 6/30 - 27,718
Bank service charge, 6/30 - 72
Collection by bank of company’s N/R, 6/30 - 71,815
Customer’s check deposited July 10, returned by bank on July 16 marked NSF, and re-deposited immediately; no entry made on
books for return or redeposit- 8,250.
The company’s cash records show these totals:
Cash receipts in July per Muntinlupa’s books 236,452
Based on the following information, how much is the cash disbursements per book?

260,375
212,529
180,885
None of the choices

Question 8
Analyze the following:
I - credit memo of previous period is added to previous book balance and deducted from current book receipts under adjusted
balance method.
II - debit memo of previous period is added both to previous period balance and current disbursement balance under book to
bank balance method.
III - deposit in transit of current period is added both to current receipts and current period balance under book to bank balance
method.
Given these, you can conclude that:

Only III is incorrect.
II is incorrect.
Only I and III are correct.
Only I and II are correct.

Question 9
Balances representing cash, accounts receivable, and payable denominated in other than the local currency should be
translated for consolidation at the:

Current rate
spot rate
average rate
historical rate
Question 10
Cash or Cash on Hand and In Banks on the balance sheet cannot include the following items:
(1) Currency or cash items on hand
(2) Deposits in foreign countries which are subject to foreign exchange restrictions
(3) Short-term bank placements of excess cash which can be pre-terminated
(4) Postdated checks of company
(5) Cash set aside for the acquisition or construction of noncurrent assets
(a) 1, 2 and 3 only (c) 1 and 3 only
(b) 2, 3 and 5 only (d) not given

2,4 and 5 only

1,2 and 3 only
1 and 3 only
None of the choices

Question 11

Bank unadjusted balance, 6/30 - 230,000
July Bank receipts - 420,000
July Bank disbursements - 500,000
Bank service charge, 6/30 - 2,000
Erroneous bank debits, 6/30 - 10,000
Erroneous bank credits, 6/30 - 40,000
NSF checks, 6/30 - 5,000
NSF checks, 7/31 - 7,000
books for return or redeposit- 10,000

How much is unadjusted book receipts?

340,000
490,000
None of the choices
270,000

Question 12
Which of the following is not true regarding book to bank balance method of bank reconciliation?

Error of entity which causes deficiency in cash inflow to cash in bank per ledger is not added to the book balance of cash.
Bank error which has an effect of overstating the bank balance is added to book balance.
error of bank which credits the depositor's account in excess is added to book balance of cash.
Error committed by entity which excessively charges the cash balance should be added to book balance of cash.

Question 13
I - Reconciling items pertaining to previous period should be removed from either current receipt or current disbursement
depending on what transaction each reconciling item relates.
II - Deposit in transit of current period minus the difference of book receipts, credit memorandum of previous period and book
errors pertaining to receipt are equal to deposit in transit of previous period minus unadjusted bank receipt plus credit
memorandum of current period plus bank errors pertaining to receipt.
III - Current NSF check returned this period and redeposited and cleared this period without the entity making any entry on
return or redeposit is deducted both from bank receipts and book disbursements columns.
Given this, you can conclude that:

None of the choices
Only II is true.
Only I is true.
Only III is true.
Question 14

books for return or redeposit- 8,250.
The company’s cash records show these totals:
Cash receipts in July per Muntinlupa’s books 236,452
How much is the cash balance per bank statement for July 31?

245,537
253,787
None of the choices
214,802

Question 15
Which of the following is true regarding bank to book balance method of bank reconciliation?

error of depositor of neglecting to record a disbursement is added to book balance of cash.
Error of depositor of recording a deposit twice is added from book balance of cash.
error of bank of excessive recording of depositor's disbursement is deducted from bank balance of cash.
None of the choices

Question 16

Bank unadjusted balance, 6/30 - 230,000
July Bank receipts - 420,000
July Bank disbursements - 500,000
NSF checks, 6/30 - 5,000
NSF checks, 7/31 - 7,000
books for return or redeposit- 10,000
How much is cash balance per bank statement as of July 31?

310,000
690,000
None of the choices
150,000

Question 17
Upon checking the cash in bank account of Maui T. <3 Company, you have ascertained the following data relative to the debits
per books and credits per bank:
Book debits in February - 400,000
Bank credits in February - 360,000
CM for interest earned in January but taken up in the books in February - 5,000
January customer check properly acknowledged by bank as P 3,000 was recorded by Maui <3 in January as - P 30,000
CM for interest earned in February but taken up in the books in March - 6,000
Erroneous bank credit - February - 2,500
Check from customer in January amounting to P 40,000 but was taken up in the books as - 4,000
Erroneous bank debit - February - 3,000
Check from customer in February amounting to P 20,000 but was taken up in the books as - P 4,000
Erroneous bank charge - January 1,000
Check by the company issued to supplier in January amounting to P 3,000 but was taken up in the books as - 30,000
Erroneous bank credit - January - 4,000
Deposit in Transit, January 31 - 50,000
How much is the deposit in transit at the end of February?

47,500
None of the choices
15,500
31,500

Question 18
The balance sheet of Mall Company as of December 31, 2002 showed the cash amount of P87,300. It was found to include the
following items:
Postal money orders from customers P2,400
Notes receivable in the possession of a collecting agency - 3,200
Receipts for expenses advanced for the account of certain suppliers 1,600
Currencies and coins on hand 600
Traveler’s check 500
Checks in payment of accounts, still in the safe of the
cashier, awaiting instructions for delivery to payees 6,000
Petty cash fund (P160 in currency and P840 in expense receipts) 1,000
The correct cash balance for the balance sheet is:

82,50
76,500
72,360
81,660

Question 19
Apache Company provides the following information for the purpose of reconciling the cash balance per book with balance per
bank statement on December 31, 2001.
The bank statement showed a balance of P200,000 on December 31.
Outstanding checks as of December 31 amounted to P50,000, including a P10,000 certified check.
Deposit in transit on December 31 was P20,000.
During December, the bank charged back NSF checks of P15,000, of which P5,000 had been redeposited and cleared by
December 27.
On December 23, the bank erroneously credited the account of Apache for P30,000 representing proceeds of loan granted to
another company.
During December, the proceeds from notes collected by the bank for Apache amounted to P75,000, net of service charge of
P2,000.

What is the cash balance to be shown on the balance sheet on December 31, 2001?

140,000
180,000
85,000
150,000
Question 20
A proof of cash is?

Is a summary of cash receipts and cash payments.
Is a formal statement showing the total cash receipts during the year
Is a physical count of currencies on hand at the end of reporting period
Is a four-column bank reconciliation showing reconciliation of cash bal per book and per bank at the beginning and end of the
current month and reconciliation of cash receipts and cash disbursements of the bank and the depositors during the current
month

Question 21
A correctly recorded 50,000 customer check by depositor from previous period is recorded by bank in previous period as
500,000.
I - Under adjusted balance method of proof of cash, reconciling item should be deducted both from previous period bank
balance and current bank disbursements
II - Under book to bank balance method of proof of cash, reconciling item should be added both from previous period book
balance and current book disbursements.
III - Under bank to book balance method of proof of cash, reconciling item should be deducted both from previous period bank
balance and current bank disbursements
Given these, you can conclude that:

Only II and III are correct.
II is correct.
Only III is incorrect.
Only I is correct.

Question 22
The books of Manila’s Service, Inc. disclosed a cash balance of 687,570 on December 31, 2010. The bank statement as of
December 31 showed a balance of 547,800. Addt’l Information that might be useful in reconciling the two balances follows:
Check number 748 for 30,000 was originally recorded on the books as 45,000.
A customer’s note dated September 25 was discounted on October 12. The note was dishonored on December 29 (maturity
date). The bank charged Manila’s account for 142,650, including a protest fee of 2,650.
The deposit of December 24 was recorded on the books as 28,950, but it was actually a deposit of 27,000.
Outstanding checks totaled 98,850 as of December 31.
There were bank service charges for December of 2,100 not yet recorded on the books.
Manila’s account had been charged on December 26 for a customer’s NSF check for 12,960.
Manila properly deposited 6,000 on December 3 that was not recorded by the bank.
Receipts of December 31 for 134, 250 were recorded by the bank on January 2.
A bank memo stated that a customer’s note for 45,000 and interest of 1,650 had been collected on December 27, and the bank
charged a 360 collection fee.
determine the adjusted cash in bank balance.

589,200
577,200
512,400
583,200

Question 23
based on the following information, the causes of the discrepancies between the book credits and bank debits are ascertained:
book credits in May - 85,800
bank debits in May - 97,650
Check issued on May 29 for P 5,700 erroneously recorded in the books of the depositor as - P 7,500
Customer's DAIF check, returned by the bank of the depositor in May - P 2,300
April bank service charges, taken up in the books in May - 30
Payment of VISA credit card automatically debited by the bank on May 25, as per ADA, but taken up in the books of the
depositor in June - P 3,000
Outstanding checks as of May 31 - P 4,500
How much is the outstanding checks at the beginning of the period?

None of the choices
4,500
11,880
12,880

Question 24
ABC Company established a P 15,000 petty cash fund at the beginning of January, 2021. The company issues a replenishment
check after considering the following petty cash fund items:
Currency and coins, P2,800.
Employees’ vales, P2,000.
Currency in envelope marked “collections for birthday party”, P1,000.
Unreplenished petty cash vouchers, P2,000.
Check drawn payable to petty cashier, P2,200.
Given these, how much is the amount to be replenished?

12,200
10,000
5,000
4,000

Question 25
In preparing its bank reconciliation for the month of April 2007, ABC, Inc. has available the following information.
Balance per bank statement, 4/30/07 Ᵽ39,140
NSF check returned with 4/30/07 bank statement 450
Deposits in transit, 4/30/07 5,000
Outstanding checks, 4/30/07 5,200
Bank service charges for April 20
What should be the correct balance of cash at April 30, 2007?

38,470
38,940
39,370
38,490
Question 26
Information on ABC Co. is shown below:
July 30 Aug. 31
Book balance 132,200 180,000
Book debits 60,000
Book credits ?
Bank balance 100,600 169,000
Bank debits 20,600
Bank credits ?
Notes collected by bank 10,000 35,000
Debit memos 7,800 8,900
Understatement of book receipts - 2,800
Deposit in transit 45,000 43,800
Outstanding checks 11,200 3,900

How much is the adjusted balance of cash on August?

132,600
134,400
136,200
208,900

Question 27
In preparing a monthly bank reconciliation, which of the following items would be added to the balance reported on the bank
statement to arrive at the correct cash balance?

Deposits in transit
Bank service charge
Outstanding checks
A customer's note collected by the bank on behalf of the depositor

Question 28
Pearl Company maintains a checking account at the City Bank. The bank provides a bank statement along with canceled checks
on the last day of each month. The July bank statement included the following information:
Balance, July 1 550,000
Deposits 1,800,000
Checks Processed 1,400,000
Service Charge 30,000
NSF Check 120,000
Monthly loan payment deducted by bank from account 100,000

Deposits outstanding totaled P100,000 and all checks written by the depositor were processed by the bank excepts for check of
P150,000.
A P200,000 July deposit from a credit customer was recorded as P20,000 debit cash and credit accounts receivable.
A check correctly recorded by the entity as P30,000 disbursement was incorrectly processed by the bank as P300,000
disbursement.

What is the cash in bank balance per ledger on July 31?

1,170,000
990,000
1,350,00
890,000

Question 29
July 30 Aug. 31
Book balance 132,200 180,000
Book debits 60,000
Book credits ?
Bank balance 100,600 169,000
Bank debits 20,600
Bank credits ?

How much is the adjusted receipts in August?

88,700
80,700
78,800
87,800

Question 30
The cash balance of CAPSIZE OVERTURN Co. comprises the following:
Cash on Hand 300,000
Cash in bank – savings – BPI 600,000
Cash in bank – current – BPI (240,000)
Cash in bank – deposit in escrow – Metrobank 300,000
Cash in bank – current – Metrobank (60,000)
Cash in bank – current – BDO (90,000)
Total 810,000

Additional information:
Cash on hand includes undeposited collections of P60,000.
The cash in bank – savings maintained at BPI includes a P150,000 compensating balance which is not restricted.

What amount of cash is reported in the financial statements?

660,000
810,000
900,000
960,000

Question 31
Trans Co. had the following balances at December 31, 2020:
Cash in checking account 35,000
Cash in money market account 75,000
Treasury bill, purchased 11/1/2020, maturing 1/31/2021 350,000
Treasury bill, purchased 12/1/2020, maturing 3/31/2021 400,000
Total 810,000

Tran’s policy is to treat as cash equivalents all highly liquid investments with a maturity of three months or less when
purchased. What amount should Trans report as cash and cash equivalents in its December 31, 2020, balance sheet (statement
of financial position)?

460,000
110,000
385,000
860,000

Question 32
Which of the following represents a debit memo?

Interest expense on a loan that is directly deducted from the depositor’s account.
Interest income earned by the deposit.
Collections made by the bank on behalf of the depositor.
Loan proceeds directly credited or added by the bank to the depositor’s account.

Question 33
Which of the following is added to the cash balance per books when preparing a bank reconciliation statement?

Credit memo
Outstanding check
Deposit in transit
Debit memo

Question 34
As an internal control, bank reconciliation statements are usually prepared

on a monthly basis.
whenever the accountant feels like it.
annually every year-end.
on a daily basis.

Question 35
The petty cash fund account of Magiting Company showed the following:
Coins and currency 5,500
Paid vouchers:
Transportation 200
Gasoline 150
Office Supplies 250
Postage Stamps 200
Due from employees 1,200
Digging deeper into the records, you realized that there is a Manager's
check returned by bank marked "NSF" for 1,000. There is also a check
drawn by company to the order of petty cash custodian amounting to 3,500.
What is the amount of the petty cash fund for balance sheet purposes?

11,000
5,800
9,000
10,000

Question 36
The amount reported as "Cash" on a company's statement of financial position normally should exclude

petty cash.
cash in a payroll account.
postdated checks that are payable to the company.
undelivered checks written and signed by the company.

Question 37
What is the proper accounting treatment for a stale check?

Revert back to cash and accounts payable.
Either Revert back to cash and accounts payable or Revert back to cash and a credit to gain.
Ignored
Revert back to cash and a credit to gain.

Question 38
July 30 Aug. 31
Book balance 132,200 180,000
Book debits 60,000
Book credits ?
Bank balance 100,600 169,000
Bank debits 20,600
Bank credits ?

How much is the adjusted disbursements in August?

14,300
17,800
13,300
16,200

Question 39
All of the following statements are true except

All items not representing checks credited to the cash in bank account should be deducted from the book credits total to arrive
at the checks drawn by the depositor.
Debit memo for NSF is not deducted from the bank debits since it represents bank disbursements.
All items debited to the account of the depositor not representing checks paid should be deducted from the bank debits total to
arrive at the checks paid by bank.
Debit memo from the previous period are deducted from the book credits of the current period because they are cash
disbursements not representing checks.

Question 40
Timex Company provided the following data relating to the cash transactions and bank account for the month of July:
Cash balance per ledger ?
Cash balance per bank statement ?
Debit memo for July service charge 5,000
Deposit of July 31 not recorded by bank until August 1 450,000
Outstanding checks, including certified check of P50,000 750,000
Proceeds of bank loan not recorded in ledger 500,000
Proceeds from customer note, face P400,000, collected by bank, collection fee of
435,000
P15,000
A creditor check had been entered in the book as P20,000 and was erroneously
200,000
deducted by the bank at
A customer check was returned by bank marked NSF 50,000
Correct cash balance 3,000,000
What is the cash balance per ledger?

3,055,000
2,555,000
2,065,000
2,120,000

Question 41
As of December 31, 20x1, the petty cash fund of TUMULT COMMOTION Co. with a general leger balance of P15,000 comprises
the following:
Coins and currencies 2,550
Petty cash vouchers:
Gasoline for delivery equipment 3,000
Medical supplies for employees 2,040 5,040
IOU’s:
Advances to employees 2,220
A sheet of paper with names of several employees together
with contribution to bereaved employee, attached is a 2,400
currency of
Checks:
Check drawn to the order of the petty cash custodian 3,000
Personal check drawn by the petty cash custodian 2,400
The entry to record the replenishment of the petty cash fund includes

A debit to cash short/overage account of P2,190 and a credit to cash on hand of P9,450.
A debit to cash short/overage account of P2,190 and a credit to cash in bank of P9,450.
A credit to cash short/overage account of P810 and a credit to cash of P12,450.
A debit to cash short/overage account of P810 and a credit to petty cash fund of P12,450.

Question 42
Timex Company provided the following data relating to the cash transactions and bank account for the month of July:
Cash balance per ledger ?
Cash balance per bank statement ?
Debit memo for July service charge 5,000
Deposit of July 31 not recorded by bank until August 1 450,000
Outstanding checks, including certified check of P50,000 750,000
Proceeds of bank loan not recorded in ledger 500,000
Proceeds from customer note, face P400,000, collected by bank, collection fee of
435,000
P15,000
A creditor check had been entered in the book as P20,000 and was erroneously
200,000
deducted by the bank at
A customer check was returned by bank marked NSF 50,000
Correct cash balance 3,000,000
what is the cash balance per bank statement?

3,700,000
3,070,000
3,050,000
2,370,000

Question 43
Pearl Company maintains a checking account at the City Bank. The bank provides a bank statement along with canceled checks
on the last day of each month. The July bank statement included the following information:
Balance, July 1 550,000
Deposits 1,800,000
Checks Processed 1,400,000
Service Charge 30,000
NSF Check 120,000
Monthly loan payment deducted by bank from account 100,000

Deposits outstanding totaled P100,000 and all checks written by the depositor were processed by the bank excepts for check of
P150,000.
A P200,000 July deposit from a credit customer was recorded as P20,000 debit cash and credit accounts receivable.
A check correctly recorded by the entity as P30,000 disbursement was incorrectly processed by the bank as P300,000
disbursement.
What is the balance per bank on July 31?

550,000
800,000
950,000
700,000

Question 44
If the balance shown on a company's bank statement is less than the correct cash balance, and neither the company nor the
bank has made any errors, there must be

deposits in transit.
deposits credited by the bank but not yet recorded by the company.
outstanding checks.
bank charges not yet recorded by the company.

Question 45
All of the following statements are correct except

Using the book to bank method, deposit in transit and outstanding check are treated in reverse.
Deposit in transit of the current month do not affect the book receipts for the current month but increased the bank receipts
for the current month.
Using the book to bank method, the book reconciling items are treated in the same manner following the adjusted balance
method.
Outstanding checks of the previous month do not affect the book disbursements for the current month but increased the bank
disbursements for the current month.
Question 46
When using the Bank to Book method in preparing two-date bank reconciliation, which reconciling item is treated in reverse?

Service Charge
Deposit in Transit
Bank Errors
Outstanding check

Question 47
Zealous Company established a petty cash fund.
Established a petty cash fund of P10,000 on January 2.
Petty Cash Expenses – January 2-31 are:
Postage 1,500
Supplies 5,500
Transportation 1,200
Miscellaneous Exp 800
The fund is replenished on February 1 and increased by P5,000.
What will be the journal entry to record the transaction on February 2 under the fluctuating fund system? (PCF = petty cash
fund)

Dr PCF 14,000 Cr Cash in bank 14,000
No entry
Dr. PCF 5,000, Dr. Postage 1,500, Dr. Supplies 5,500, Dr. Transportation 1,200, Dr. Miscellaneous 800 Cr. Cash in bank 14,000
Dr. PCF 5,000 Cr Cash in bank 5,000

-Use the following information for the next three questions:
The accounting records and bank statement of Entity A show the following information:
SUBSIDIARY LEDGER
CASH IN BANK - BPI CURRENT ACCOUNT
Date Description Debit Credit Balance
6/1 Bal. forwarded 881,000
6/11 Check #1113 130,800 750,200
6/15 Check #1114 220,000 530,200
6/16 Deposit 295,800 826,000
6/22 Deposit 670,000 1,496,000
6/24 Check #1115 80,000 1,416,000
6/28 Check #1116 380,000 1,036,000
6/29 Deposit 160,000 1,196,000

METROBANK
BANK STATEMENT - ENTITY A
Date Description Debit Credit Balance
6/1 Bal. forwarded 881,000
6/10 Deposit 350,000 1,231,000
6/15 Payment 2,000 1,229,000
6/15 Check #1114 220,000 1,009,000
6/16 Deposit 295,800 1,304,800
6/20 Payment 50,000 1,254,800
6/22 Deposit 670,000 1,924,800
6/24 Check #1115 80,000 1,844,800
6/26 Check #1113 130,800 1,714,000
6/28 Deposit 410,000 2,124,000

Additional information:
The payments of ₱2,000 and ₱50,000 shown on the bank statement pertain to the cost of checkbook requested from the bank
and the monthly amortization of a bank loan, respectively. The loan payment includes payment for interest of ₱8,000.
Deposits shown on the bank statement but not on the cash ledger represent collections of accounts receivable.
Question 48
How much is the deposit in transit?

52,000
380,000
160,000
102,000
Question 49
1 / 1 pts
How much is the credit memo?

380,000
52,000
760,000
160,000

Question 50
How much is the adjusted cash balance?

1,380,000
1,904,000
1,760,000
1,940,000

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SAMPLE QUESTIONS

Guide multinational entities in developing generally accepted auditing standards

Eliminate alternative accounting principles.

Lead uniformity of financial statements.

Define the basic objectives, terms and concepts of accounting.

-What is the primary distinction between revenue and gain?

The likelihood that the transaction will recur

The nature of the activity that gives rise to the transaction

The materiality of the amount

The method of disclosing the transaction

may flow from it.

-A decrease in an asset arising from peripheral or incidental transaction is called

-An example of direct matching of an expense with revenue would be

Office Salaries Expense

Direct labor costs incurred to produce inventory sold during a period

to represent, the information possesses which characteristic?

Free from Error

-The underlying theme of the Conceptual Framework is

-Small expenditures for tools are expensed immediately.

-When in doubt, recognize all losses and don’t recognize gains.

-It is the goal achieved by consistency.

-There are no errors or omissions in the description of the phenomenon.

Free from Error

-Generally, revenue is recognized at the point of sale.

-Obligation is a duty or responsibility that an entity has no practical ability to avoid.

-Which of the following statements is not normally an objective of financial reporting?

To provide information about an entity’s liquidation value.

To provide information that is useful in lending and investing decisions.

-Which of the following is a fundamental quality of useful accounting information?

A coherent set of accounting standards and rules should result.

Monetary unit assumption

Going concern assumption

Economic entity assumption

Substance over form

Form over substance

Systematic and rational allocation

Discretionary and arbitrary allocation

-The current cost basis of accounting is strictly required under

Both the physical and financial capital concepts

The physical capital concept

The financial capital concept

Neither the physical nor financial capital concept.

-What is the authoritative status of the Framework?

-For the next eight questions:

accounts payable 775,250 goods in process 886,000

Accounts Receivable 1,284,700 income tax payable 110,750

accrued expenses 188,275 investment in associate 2,215,000

accrued interest on note payable 33,225 land 3,322,500

acc. dep.- building 4,208,500 long- term refundable deposit 44,300

acc. dep.- machinery and equipment 775,250 manufacturing supplies 110,750

bonds- payable- non- current 3,987,000 notes payable 332,250

building 9,967,500 notes receivable, trade 221,500

Cash Equivalent 332,250 patent 1,107,500

Cash in bank 664,500 Petty cash fund 22,150

Cash on hand 88,600 plant expansion fund 4,430,000

cash surrender value 221,500 prepaid insurance 44,300

current portion of bonds payable 443,000 raw materials 332,250

deferred tax liability 221,500 retained earnings 8,084,750

dividends payable 221,500 retained earnings appropriated 2,215,000

financial assets at fair value 443,000 share premium 4,430,000