In the course of your audit of the Las Pinas Corporation, its c. P1,080,00 d. P1,120,000 C.

0 d. P1,120,000 C. Seek information about contingent liabilities and

controller is attempting to determine the amount of cash to be 0 security segments
reported on its 31 December 2021 statement of financial 6. Cash and cash equivalents D. Provide the data necessary to prepare a proof of
position. The following information is provided: a. P2,917,20 b. P3,052,000 cash
a. Commercial savings account of P1,200,000 and a 0 In the audit of Pasig Company’s cash account, you obtained
commercial checking account balance of P1,800,000 are c. P3,066,00 d. P3,074,900 the following information:
held at PS Bank 0 The company’s bookkeeper prepared the following bank
b. Travel advances of P360,000 for executive travel for the Shown below is the bank reconciliation for Marikina Company reconciliation as of 30 November 2021:
first quarter of the next year (employee to reimburse for November 2021: Balance per bank, 30
through salary deduction) Balance per bank, 30 Nov. 2021 P90,800
c. A separate cash fund in the amount of P3,000,000 is Nov. 2021 P150,000 Undeposited collections P5,000
restricted for the retirement of a long-term debt Add: Deposits in Transit P24,000 Bank service charges P100
d. Petty cash fund of P10,000. Total P174,000 Bank collection of
e. An I.O.U. from a company officer in the amount of Less: Outstanding customer’s note (P8,000)
P40,000. Checks P28,000 Outstanding checks Number &
f. A bank overdraft of P250,000 has occurred at one of the Less: Bank credit Amount
banks the company uses to deposit its cash receipts. At recorded in error P10,000 P38,000 1159 - P3,000
the present time, the company has no deposits at this Cash balance per books, 1767 – P5,000
bank. 30 Nov. 2021 P136,000 1915 – P2,000 (P10,000)
g. The company has two certificates of deposit, each Book Balance – 30 Nov.
totaling P1,000,000. These certificates of deposit have The bank statement for December 2021 contains the following 2021 P77,900
maturity of 120 days. data: Additional data are given as follows:
h. Las Pinas has received a check dated 02 January 2022 Total deposits P110,000 a. Company recordings for December:
in the amount of P150,000. Total charges, including an NSF  Total collections from customers – P165,000
i. Las Pinas has agreed to maintain a cash balance of check of P8,000 and a service  Total checks draw – P98,000
P200,000 at all times at PS Bank to ensure future credit charge of P400 P96,000 b. Bank statement totals for December:
availability.  Charges – P123,800
j. Bills and coins on hand amounted to P15,000. All outstanding checks on 30 November 2021, including the  Credits – P169,000
k. Cyptocurrencies valued at P100,000. bank credit, were cleared in the bank in December 2021. There c. Check no. 1159 dated 25 November 2021, was entered
1. How much is the cash and cash equivalents to be were outstanding checks of P30,000 and deposits in transit of as P3,000 in payment of a voucher for P30,000. Upon
reported on 31 December 2021? P38,000 on 31 December 2021. examination of the checks returned by the bank, the
a. P2,575,00 b. P2,825,000 7. How much is the cash balance per bank on 31 December actual amount of the check was P30,000.
0 2021? d. Check no. 2113 dated 20 December 2021 was issued to
c. P3,025,00 d. P5,025,000 a. P150,000 b. P154,000 replace a mutilated check (no. 1767), which was returned
0 c. P164,000 d. P172,400 by the payee. Both checks were recorded in the amount
The cash account in the ledger of Pateros Company had a 8. How much is the December receipts per books? drawn, P5,000, but no entry was made to cancel check
balance of P844,800 at 31 December 2021. An examination of a. P96,000 b. P110,000 no. 1767
the account, however, disclosed the following: c. P124,000 d. P148,000 e. The December bank statement included a check drawn
 The sales book was left open up to 05 January 2022, and 9. How much is the December disbursements per books? by Sipag Company for P1,500.
cash sales totaling P120,000 were considered as sales in a. P79,600 b. P89,600 f. Undeposited collections on 31 December 2021 – P8,000
December c. P96,000 d. P98,000 g. The service charge for December was P150 which was
 Checks of P74,400 in payment of liabilities were 10. How much is the cash balance per books on 31 charged by the bank to another client
prepared before 31 December 2021, recorded in the December 2021? h. The bank collected a note receivable of P7,000 on 28
books, but not mailed or delivered to payees a. P150,000 b. P162,000 December 2021, but the collection was not received on
 Post-dated checks totaling P62,400 are being held by the c. P170,400 d. P180,400 time to be recorded by Pasig
Cashier as part of Cash. The company’s experience 11. The adjusted cash in bank balance as of 31 December i. The outstanding checks on 31 December 2021, were
shows that post-dated checks are eventually realized 2021 is?  No. 1767 – P5,000
 Customer’s check for P12,000 deposited with but a. P141,600 b. P162,000  No. 2856 – P1,300
returned by Bank, “NSF” on 27 December 2021. c. P172,000 d. P196,000  No. 2910 – P2,300
 The Cash account includes P320,000 earmarked for the 12. An auditor for a large service company is performing an  No. 2925 – P4,100
purchase of personal computers which will soon be audit of the company’s cash balance. The auditor is Based on the given information, determine the following:
delivered. considering the most appropriate audit procedure to use 18. Unadjusted cash balance per books as 31 Dec. 2021:
2. The cash balance to be shown on the statement of to ensure that the amount of cash is accurately recorded a. P144,900 b. P152,750
financial position at 31 December 2021 should be on the company’s financial statements. The most c. P152,800 d. P165,700
a. P404,800 b. P416,800 appropriate audit procedures for the objective are: 19. Adjusted cash balance as of 30 Nov. 2021:
c. P724,800 d. P799,200 A. Examine bank reconciliations, confirm bank a. P58,800 b. P63,800
You were able to gather the following from the 31 December balances, and verify cut off of receipts and c. P85,800 d. P90,800
2021 trial balance of Mandaluyong Corporation in connection disbursements; foot totals of reconciliations and 20. Adjusted book receipts for Dec. 2021:
with your audit of the company: compare to cash account balances a. P170,500 b. P172,000
Cash on hand P500,000 B. Review collection procedures and perform an c. P173,000 d. P182,000
Petty cash fund P10,000 analytical review of accounts receivable; confirm 21. Adjusted bank disbursements for Dec. 2021:
BPI current account P1,000,000 balances of accounts receivable; and verify the a. P76,150 b. P98,150
Security Bank current account No. 01 P1,080,000 existence of appropriate procedures and facilities c. P120,150 d. P125,150
Security Bank current account No. 02 (P80,000) C. Compare cash receipt lists with the receipts journal 22. Adjusted cash balance as of 31 Dec. 2021:
PNB Savings Account P1,200,000 and bank deposit slips; review the segregation of a. P132,650 b. P134,650
PNB Time Deposit P500,00 duties, observe, and test cash receipts c. P137,650 d. P137,800
D. Review the organizational structure and functional You obtained the following information on the current account
Cash on hand includes the following items: responsibilities; verify the existence and describe of Paranaque Company during your examination of its financial
a. Customer’s check for P40,000 returned by bank on 26 the protection procedures for unused checks, statements for the year 31 December 2021.
December 2021 due to insufficient fund but subsequently including security measures.
redeposited and cleared by the bank on 08 January 2022 13. Which of the following substantive audit procedures is The bank statement on 30 November 2021 showed a balance
b. Customer’s check for P20,000 dated 02 January 2022, least likely to be performed by the auditor to gather of P306,000. Among the bank credits in November was
received on 29 December 2021 evidence in support of the deposits in transit? customer’s note for P100,000 collected for the account of the
c. Postal money orders received from customers, P30,000. a. Inspect supporting documents for reconciling item company which the company recognized in December among
not appearing on cutoff bank statement its receipts. Included in the bank debits were cost of
The petty cash fund consisted on the following items as of 31 b. Trace items on the bank reconciliation to cutoff checkbooks amounting to P1,200 and a P40,000 check which
December 2021: bank statement was charged by the bank in error against Paranaque’s account.
Bills and coins P2,000 c. Trace to cash receipts journal Also, in November you ascertained that there were deposits in
Employees’ vales P1,600 d. Inspect bank credit memo transit amounting to P80,000 and outstanding checks totaling
Currency in an envelope marked 14. Which of the following substantive audit procedures is P170,000.
“collections for charity” with names least likely to be performed by the auditor to gather
attached P1,200 evidence in support of the outstanding checks? The bank statement for the month of December showed total
Unreplenished petty cash vouchers P1,300 a. Confirm directly with bank credits of P416,000 and total charges of P204,000. The
Check drawn by Mandaluyong b. Trace to cash disbursements journal company’s books for December showed total debits of
Corporation, payable to petty cashier P4,000 c. Ascertain reason for unusual delay P735,600, total credits of P407,200 and a balance of P485,600.
P10,000 d. Trace item on the bank reconciliation to cutoff bank Bank debit memos for December were: No. 121 for service
statement charges, P1,600 and No. 122 on a customer’s returned check
Included among the checks drawn by Mandaluyong 15. Which of the following sets of information does an auditor marked “Refer to Drawer” for P24,000.
Corporation against the BPI current and recorded in December unusually confirm on one form?
2021 are the following: a. Cash in bank and collateral for loans On 31 December 2021, the company placed with the bank a
a. Check written and dated 29 December 2021 and b. Accounts payable and purchase commitments customer’s promissory note with a face value of P120,000 for
delivered to payee on 02 January 2022, P80,000. c. Accounts receivable and accrued interest collection The company treated this note as part of its receipts
b. Check written on 27 December 2021 dated 02 January receivable although the bank was able to collect on the note only in
2022, delivered to payee on 29 December 2021, d. Inventory on consignment and contingent liabilities January, 2022.
P40,000. 16. The primary purpose of sending a standard confirmation
request to financial institutions with which the client has A check for P3,960 was recorded in the company cash
The credit balance in the Security Bank account No. 2 done business during the year is to payments books in December P39,600. Based on the
represents checks drawn in excess of the deposit balance. a. Corroborate information regarding deposit and loan information above, answer the following questions:
These checks were still outstanding at 31 December 2021. The balances 23. How much is the undeposited collections as of 31
savings account deposit in PNB has set aside by the board of b. Provide the data necessary to prepare a proof of December 2021?
directors for acquisition of new equipment. This account is cash a. P139,600 b. P179,600
expected to be disbursed in the next 3 months after the end of c. Detect kiting activities that may otherwise not be c. P219,600 d. P339,600
the reporting period. Based on the given information and the discovered 24. How much is the outstanding checks as of 31 December
result of your audit, determine the adjusted balances of the d. Request information about contingent liabilities and 2021?
following: secured transactions a. P191,960 b. P363,160
3. Cash on hand 17. An auditor ordinarily sends a standard confirmation c. P361,960 d. P397,600
a. P410,000 b. P440,000 request to all banks with which client has done business 25. How much is the adjusted cash balance as of 30
c. P470,000 d. P530,000 during the year under audit, regardless of the year-end November 2021?
4. Petty cash fund balance. A purpose of this procedure is to a. P157,200 b. P176,000
a. P2,000 b. P4,900 A. Request a cutoff bank statement and related c. P216,000 d. P256,000
c. P6,000 d. P7,200 checks be sent to the auditor 26. How much is the adjusted bank receipts for December?
5. BPI Current Account B. Detect kiting activities that may otherwise not be a. P435,600 b. P475,600
a. P1,000,00 b. P1,040,000 discovered c. P515,600 d. P635,600
0
27. How much is the adjusted book disbursements for Marites Co., uses a calendar year as accounting period. 180-day treasury bill due on 15 March
December? Assume that the company is using the imprest method in G 2022 120000
a. P225,960 b. P395,960 accounting for petty cash fund: Note receivable in the possession of a
c. P397,160 d. P431,600 a. Petty cash fund was set up on 01 November 2021 in the H collecting agency 20,000
28. How much is the adjusted cash balance as of 31 amount of P2,400. I PNB – Checking account #211-009-091 325,900
December 2021? b. On 29 November 2021, a check was issued to replenish Cash on Hand, including customer
a. P195,640 b. P220,000 the fund, the composition of which was as follows: J postdated check of P15,000 23,000
c. P375,640 d. P625,640  Currency (bills and coins) – P166 Savings deposit, earmarked for
The Valenzuela Company was organized on 15 January 2021  Vouchers showing expenditures for: K acquisition of equipment 210,000
and started operation soon thereafter. The Company cashier o Office supplies – P270 A check payable to San Ignacio
who acted also as the bookkeeper had kept the accounting o Charges from purchased of supplies – P124 Incorporated, dated January 5, 2022,
records very haphazardly. The manager suspects him of o Repairs and maintenance – P350 that was included in the December 31
defalcation and engaged you to audit his account to find out the o Wages paid to casual employees – P950 PNB Checking Account
extent of the fraud, if there is any. o Charges from purchased goods to be sold – L #211-009-091 50,000
P400 Bond Sinking Fund (used to finance the
On 15 November 2021, when you started the examination of c. On 18 December 2021, the fund was replenished and maturing long-term obligation
the accounts you find the cash on hand to be P25,700. From correspondingly increased to P3,000; its composition M on March 31, 2022) 150,000
inquiry at the bank, it was ascertained that the balance of the included the following: Overdraft in PNB Checking Account
Company’s bank deposit in current account on the same date  Currency (bills and coins) – P158 N #211-099-085 (50,000)
was P131,640. Verification revealed that the check issued for Check #801 in payment to Accounts
 Vouchers showing expenditures for:
P9,260 is not yet paid by the bank. The corporation sells at Payable, dated Dec. 31, 2021
o Store supplies – P304
40% above cost. Your examination of the available records O not mailed until January 5, 2022 20,000
disclosed the following information: o Accounts payable – P914 Advances to Officers/Employees for
 Share capital issued at par for cash – P1,600,000 o Charges from purchased of goods to be sold Seminars (no liquidation is
 Real estate purchased and paid in full – P1,000,000 – P242 P required) 80,000
 Mortgage liability secured by real estate – P400,000 o Miscellaneous Expenses – P782 Money market placement (due June 30,
 Furniture and fixtures (gross) bought on which there is d. An examination on 31 December 2022 disclosed the Q 2022) 600,000
still balance unpaid of P30,000 – P145,000 following composition of the fund although it was not Listed stock held as temporary
 Outstanding notes due to bank – P160,000 replenished on this date: R investment 100,000
 Total amount owed to creditors on open account –  Currency (bills and coins) – P958 Check #789 in payment to Suppliers,
P231,420  Check of office manager, dated 05 January 2022 – dated January 5, 2022 and
 Total sales – P1,615,040 P1,000 S recorded December 31, 2021. 35,000
 Total amount still due from customers – P426,900  Vouchers showing expenditures for: T Customer’s certified checks 10,000
 Inventory of merchandising on November 15 at cost – o Office supplies – P126 U Pension fund 150,000
P469,600 o Miscellaneous expenses – P90 Total 2,568,900
 Expenses paid excluding purchases – P303,780 o Accounts payable – P800 Answer the following questions
Compute the following as of 15 November 2021: e. On 05 January 2022, the check of the office manager 42. The entry to correct/adjust item F is:
29. Collections from sales was cashed and the proceeds were added to the petty a. Investment 50,000
a. P1,153,60 b. P1,615,040 cash fund. Cash 50,000
0 f. On 06 January 2027, replenished disbursement from 18
c. P1,188,14 d. P2,041,940 December 2021 to 05 January 2022. b. Other Assets 50,000
0 Answer the following questions Cash 50,000
30. Payment for purchases 38. The entry to record the Nov. 29 replenishment of the
a. P922,180 b. P1,207,204 petty cash is? c. Short-term investment 50,000
c. P1,391,78 d. P1,854,620 a. Operating Expenses 1,694 Cash 50,000
0 Freight-in 400
31. Total cash disbursements Cash short/over 140 d. No adjustment needed
a. P2,340,96 b. P2,625,984 Cash-in-Bank 2,234 43. The entry to correct/adjust item L is:
0 a. Accounts payable 50,000
c. P2,810,56 d. P3,273,400 b. Operating Expenses 2,234 Cash 50,000
0 Cash-in-Bank 2,234
32. Unadjusted cash balance b. Cash 50,000
a. P74,740 b. P537,580 c. Operating Expenses 1,694 Other Liabilities 50,000
c. P722,156 d. P1,007,180 Freight-in 400
33. Cash balance Cash short/over 140 c. Cash 50,000
a. P0 b. P389,500 Petty Cash Fund 2,234 Accounts payable 50,000
c. P574,076 d. P859,100
34. A client maintains two bank accounts. One of the d. No entry since the company is using an d. No adjustment needed
accounts, Bank A, has an overdraft of P100,000. The impress fund system 44. The entry to correct/adjust item M is:
other account, Bank B, has a positive balance of 39. The adjusted Petty Cash Fund balance of Marites a. Investment 150,000
P50,000. To conceal the overdraft from the auditor, the Corporation on 31 December 2021 is? Cash 150,000
client may decide to: a. P3,000 b. P1,958
A. Draw a check for at least P100,000 on Bank A for c. P984 d. P958 b. Other Assets 150,000
deposit in Bank B. Record the receipt but not the 40. The entry to record the 31 December 2006 adjustment of Cash 150,000
disbursement and list the receipt as a deposit in petty cash fund is?
transit. Record the disbursement at the beginning a. Operating Expenses 216 c. Short-term investment 150,000
of the following year Accounts payable 800 Cash 150,000
B. Draw a check for at least P100,000 on Bank B for Cash short/over 26
deposit in Bank A. Record the receipt but not the Petty cash fund 1,042 d. No adjustment needed
disbursement and list the receipt as a deposit in 45. The corporation’s cash and cash equivalents balance on
transit. Record the disbursement at the beginning b. Operating Expenses 216 31 December 2021 is?
of the following year Accounts payable 800 a. Overstated by b. Overstated
C. Draw a check for P100,000 on Bank B for deposit Cash short/over 26 P1,950,100 by
in Bank A. Record the disbursement but not the Cash-in-Bank 1,042 P1,895,100
receipt. List the disbursement as an outstanding c. Overstated by d. Overstated
check, but do not list the receipt as a deposit in c. Operating expenses 216 P1,845,100 by
transit. Record the receipt at the beginning of the Accounts payable 800 P1,795,100
following period Advances – 1,000 46. The adjusted cash and cash equivalents balance on 31
D. Draw a check for at least P100,000 on Bank A for employees December 2021 is?
deposit in Bank B. Record on the disbursement but Cash short/over 26 a. P618,800 b. P623,800
not the receipt and list the disbursement as an Petty cash fund 2,042 c. P673,800 d. P723,800
outstanding check. Record the receipt at the d. No entry since the company is using an 47. The cashier of Weakness Company covered a shortage
beginning of the following year. impress fund system in the cash working fund with cash obtained on 31
35. While performing an audit of cash, an auditor begins to 41. The entry to record the 06 January 2022 replenishment December 2021 from a bank by cashing but not
suspect check kiting. Which of the following is the best of the fund is? recording a check drawn on the company out of town
evidence that the auditor could obtain concerning a. Operating Expenses 216 bank. How would you as an auditor discover the
whether kiting is taking place? Accounts payable 800 manipulation?
a. Documentary evidence obtained by vouching Cash short/over 26 A. By confirming all December 31 balances
credits on the latest bank statement to supporting Petty cash fund 1,042 B. By counting the cash working fund at the close of
documents business on December 31
b. Documentary evidence obtained by vouching b. Operating Expenses 216 C. By investigating items returned with the bank cut-
entries in the cash account to supporting Accounts payable 800 off statements of the succeeding month
documents Cash short/over 26 D. By preparing independent bank reconciliations as
c. Oral evidence obtained by discussion with Cash-in-Bank 1,042 of December 31.
controller personnel
d. Evidence obtained by preparing a schedule of c. Operating expenses 216
interbank transfers Accounts payable 800
36. Two months before year-end, the bookkeeper Advances – 1,000
erroneously recorded the receipt of a long-term bank employees
loan by a debit to cash and a credit to sales. Which of the Cash short/over 26
following is the most effective procedure for detecting this Cash-in-Bank 2,042
type of error? d. No entry since the account has already been
A. Analyze bank confirmation information adjusted on 31 December 2021
B. Analyze the notes payable journal The “Cash” account of Don Corporation’s ledger account on 31
C. Prepare year-end bank reconciliation December 2021 showed the following information:
D. Prepare a year-end bank transfer schedule Petty cash fund (including P7,500
37. Postdated checks received by mail in settlement of A unreplenished expenses P15,000
customer’s account should be B Redemption Fund Account – PNB 500,000
a. Returned to customer C Traveler’s check 100,000
b. Stamped with restrictive endorsement D Money Order 10,000
c. Deposited immediately by the cashier Treasury bill, purchased on 01
d. Deposited the day after together with cash receipts December 2021 (due on 01 February
E 2022) 50,000
F Time deposit due on 31 March 2022 50,000