AP.

M-1402 (AUDIT OF CASH)

MULTIPLE CHOICE QUESTIONS-THEORY

1. Which of the following is not an audit objective related to cash?

a. Reported cash exists
b. The client has ownership rights in the reported cash.
c. Compensating cash balances are reported as other assets.
d. The reported cash balance includes all cash transaction that should have been
recorded.
2. The process of transferring money from one bank account to another and improperly
recording the transaction
a. Lapping
b. Embezzling
c. Kiting
d. Defalcation
3. An auditor who is engaged to examine the financial statements of a business enterprise
will request a cut-off bank statement primarily in order to
a. Verify the cash balance reported on the bank confirmation inquiry form.
b. Verify reconciling items on the clients bank reconciliation.
c. Detect lapping
d. Detect kiting
4. To gather evidence regarding the balance per bank in a bank reconciliation, an auditor
would examine all of the following except
a. cut-off bank statement
b. bank confirmation
c. year-end bank statement
d. general ledger
5. The auditor should ordinarily mail confirmation requests to all banks which the client
has conducted any business during the year, regardless of the year-end balance, since
a. The confirmation form also seeks information about indebtedness to the bank.
b. This procedure will detect kiting activities which would otherwise not be detected.
c. The mailing confirmation forms to all such banks are required by PSA.
d. Tis procedure relieves the auditor of any responsibility with respect to non-detection
of forged checks.
6. Which of the following sets of information does an auditor usually confirm on one form?
a. Accounts payable and purchase commitments.
b. Cash in bank and collateral for loans.
c. Inventory on consignments and contingent liabilities.
d. Accounts receivable and accrued interest receivable
7. In October, three months before year-end, the bookkeeper erroneously recorded the
receipt of a one year bank loan with a debit to cash and credit to miscellaneous revenue.
Select the most effective method for detecting this type of error.
a. Foot the cash receipts journal for October
b. Send a bank confirmation as of the year-end
c. Prepare bank reconciliation as of the year-end.
d. Prepare a bank transfer schedule as of the year-end
8. Which of the following error will be discovered as a result of the audit of the bank
reconciliation?
a. Failure to record bank deposits
b. Billing customer for an improper amount
c. Payment for raw materials that were not received
d. Payment of interest to an affiliate for an amount in excess of the existing rate
9. An auditor ordinarily sends a standard confirmation request to all banks with which the
client has done business during the year under audit, regardless of the year-end balance.
A purpose of this procedure is to
a. Provide the data necessary to prepare a proof of cash
b. Request that cut-off bank statement and related checks be sent to the auditor.
c. Detect kiting activities that may otherwise no bet discovered.
d. Seek information about other deposit and loan amounts that come to the attention of
the institution in the process of completing the confirmation
10. As one of the year-end audit procedures, the auditor instructed the clients personnel to
prepare a standard bank confirmation request for a bank account that had been closed
during the year. After the clients treasurer had signed the request, it was mailed by the
assistant treasurer. What is the major flaw in this audit procedure?
a. The confirmation request was signed by the treasurer
b. Sending the request was meaningless because the account was closed before the year-
end
c. The request was mailed by assistant treasurer.
d. The CPA did not sign the confirmation request before it was mailed.
11. The auditors count of cash should be coordinated with the:
a. Consideration of the internal controls with respect to cash.
b. Close business on the balance sheet date
c. Count of marketable securities
d. Count of inventories
12. The receipt of the completed standard bank confirmation form would provide the auditor
with all of the following items except
a. The balances in all bank accounts with that bank
b. Any restrictions on withdrawals
c. The adjusted cash balances
 d. Loan balances with that bank
13. An auditor should trace bank transfers for the last part of the audit period and first part of
the subsequent period to detect whether
a. The cash receipts journal was held open for a few days after year-end.
b. The last checks recorded before the year-end were actually mailed by the year-end
c. Cash balances were overstated because of kiting.
d. Any unusual payments to or receipts from related parties occurred.

***The information below was taken from the bank transfer schedule prepared during the audit
of BAY Co.s financial statement for the year ended December 31, 2013. Assume all checks are
dated and issued on December 30, 2013.

Disbursement date Receipt date

Check no. From To Per books Per bank Per books Per bank
101 National Federal Dec. 30 Jan.4 Dec.30 Jan. 3
202 Country State Jan.3 Jan.2 Dec.30 Dec.31
303 Federal American Dec. 31 Jan.3 Jan.2 Jan. 2
404 State Republic Jan. 2 Jan.2 Jan.2 Dec.31

14. Which of the above checks might indicate kiting?

a. #101 and #303
b. #202 and #404
c. #101 and #404
d. #202 and #303
15. A cash shortage may be concealed by transporting funds from one location to another or
by converting negotiable assets to cash. Because of this, which of the following is vital?
a. simultaneous confirmations
b. simultaneous bank reconciliations
c. simultaneous verifications
d. simultaneous surprise cash count.
16. When negotiable instrument securities are of considerable volume, planning by the
auditor is necessary to guard against
a. Unauthorized negotiation of the securities before they are counted.
b. Unrecorded sales of securities after they are counted.
c. Substitution of securities already counted for other securities which should be on
hand but are not.
d. Substitution of authentic securities with counterfeit securities.
17. A client has large and active investment portfolio that kept in bank safe deposit box. If
the auditor is unable to count the securities at the balance sheet date, the auditor most
likely will
 a. Request the bank to confirm to the auditor the contents of the safe deposit box at the
balance sheet date.
b. Examine supporting evidence for transactions occurring during the year.
c. Count the securities at the subsequent date and confirm with the bank whether
securities were added or removed since the balance sheet date.
d. Request the client to have the bank seal the safe deposit until the auditor can count the
securities at a subsequent date.
18. By preparing a four-column reconciliation (proof of cash) for the last month of the
year, an auditor will generally be able to detect:
a. An unrecorded check written at the beginning of the month which was cashed during
the period covered by the reconciliation.
b. A cash sale which was not recorded on the books and was stolen by a bookkeeper
c. An embezzlement of unrecorded cash receipts on receivables before they had been
deposited into the bank.
d. A credit sale which has been recorded twice in the sales journal.
19. Jones embezzled P10, 000 from his companys account in Bank A. At year-end he did the
shortage by making a deposit on December 31 in Bank A, drawn on Bank B. He has not
recorded the transaction on the books. This an example of
a. Lapping
b. Effective cash management
c. Kiting
d. Related party transactions
20. Which of the following is most likely to be effective in detecting kiting?
a. Bank confirmation
b. Bank transfer schedule prepared using only the cash receipts and cash disbursements
journals
c. Comparison of bank cut-off statement to the cash receipts and disbursements records
d. Receivable confirmation
21. Which of the following manipulations of cash transactions would overstate the cash
balance on the financial statements?
a. Understatement of outstanding checks
b. Overstatement of outstanding checks
c. Understatement of deposit in transit
d. Overstatement of deposit in transit
22. The standard form to confirm account balances with Financial Institutions includes
information on all of the following except:
a. Date due of direct liability
b. The principal amount paid on direct liability
c. Description of collateral for direct liability
d. The interest date of the direct liability
23. Which of the following is one of the better auditing techniques that might be used by an
auditor to detect kiting?
a. Review composition of authenticated deposit slips
b. Review subsequent bank statements and cancelled checks received directly from the
banks
c. Prepare a schedule of bank transfers
d. Prepare year-end bank reconciliations
24. On receiving the bank cut-off statement, the auditor should trace:
a. Deposits in transit on the year-end bank reconciliation to deposits in the cash receipts
journal
b. Checks dated prior to year end to the outstanding checks listed on the year-end
reconciliation
c. Deposits listed on the cut-off statement to deposits in the cash receipts journal
d. Checks dated subsequent to year end to the outstanding checks listed on the year-end
bank reconciliation
25. Which of the following cash transfers result in a misstatement of cash at December 31,
2011?
Disbursement Receipts
Recorded in Paid by bank Recorded in Received by
books books bank
A. 12/31/11 01/04/12 12/31/11 12/31/11
B. 01/04/12 01/05/12 12/31/11 12/31/11
C. 12/31/11 01/05/12 12/31/11 01/04/12
D. 01/04/12 01/11/12 01/04/12 01/04/12
STRAIGHT PROBLEMS

PROBLEM 1

The cash and cash equivalents account in the ledger of Ajalon Company had a balance of
P5, 935, 000 at December 31, 2014. An examination of the account, however, disclosed the
following.

1. Current account at May bank P 200, 000

2. Current account at DBP (100, 000)
3. Payroll account 500, 000
4. Saving account in rural bank 1, 000, 000
5. Treasury warrants 200, 000
6. Treasury note, due November 30, 2015 400, 000
7. Change fund 10, 000
8. Credit memo from a vendor for purchase return 20, 000
9. Travellers check 50, 000
10. Customers checks returned by the bank marked 15, 000
DAIF
11. Money order 30 , 000
12. Petty cash fund 10, 000
13. Treasury note, due 2/28/15 200, 000
14. Treasury bills, due 1/31/15 300, 000
15. Cash sinking fund 500, 000
16. Preferred redemption 800, 000

Audit notes:

a. Rural Bank was closed two years ago. The company expects to recover only P0. 60 for
every peso deposited.
b. This amount includes unreplenished vouchers totalling P7, 000 as of December 31, 2014.
c. This is a two-year treasury note acquired on December 31, 2014.
d. This a 180-day treasury bill acquired on July 31, 2014.

Required:

How much should Ajalon Company report as cash and cash equivalent on its December 31, 2014
balance sheet? P2, 993, 000
PROBLEM 2

The auditor for Diadem Jade Company examined the office cash working fund immediately after
the close of the business June 30, 2014, the end of the companys fiscal year. The following fund
composition was arrived at:

Currency P972

Unreplenished vouchers:

Supplies 338

Transportation 240

Repairs 170

Advances to office employee 400

Check drawn by Diadem Jade Co. payable to Jap, cash custodian 1, 100

A check prepared by an employee payable to Diadem Jade Co. 230

A sheet of paper bearing the signatures of several employees,

together with their contributions (total P500) for a gift to a departing

employee. Attached to the paper is currency of 500

The cash working fund has an imprest of P4, 000.

Required:

1. Compute the amount of cash shortage. P500

2. Adjusting entries on June 30, 2014.
Supplies expense 388
Transportation expense 240
Repair expense 170
Advances of office employee 400
Cash in bank 1198
Receivable- custodian 500
Cash working fund 500

Advances of office employee 230

Cash working fund 230
PROBLEM 3

The following cash count sheet and additional information pertain to the accounts of Brewer
Corporation for the year ended December 31, 2014.

Cash count date: December 16, 2014

Currency- Details omitted 4, 800

Unreplenished petty cash vouchers

Vouchers date Explanation

11/20/2014 postage stamps 100

12/04/2014 repair of typewriter 150

12/12/2014 transportation-messenger 60

12/15/2014 office supplies 90 400

Advances all properly approved 500

Total amount counted 5, 750

Accountability:

Petty cash fund 1, 000

Undeposited collections 4, 900 5, 900

Shortage 150

Additional information:

1. The last replenishment of the fund was made on December 14, 2014 cocering the
period from December 1 to 14, 2014.
2. Found inside the cash box were two pay envelopes which had been opened and the
contents aggregating P240 removed. The face of the envelope bore the notation
unclaimed.

Required: Compute the amount of cash shortage. P750

PROBLEM 4

You are examining the accounts of Joash Beauty Salon. Your count of the imprest cash fund,
made at 9:00 a.m. on January 2, 2014, in the presence of Joezer petty cashier, revealed:

Coins Bills

Quantity Denominations Quantity Denominations

32 P 1. 00 4 500

40 0.25 3 100

10 20

15 10

Checks:

Date Payee Maker Amount

December 27 Cash Manso, Beautician P 5, 000

30 Joezers Raymund, Hairdresser 6, 100

30 Joezers Andrew, customer 6, 500

Unpaid stamps:

Various denomination P 80

Vouchers:

Date Nature of Disbursements

December 15 transportation 65

16 office supplies 70

17 xerox fees 80

28 postage 150

January 2 newspaper 10

2 freight charges 50
IOUs

Date Maker

December 20 Monterola, employee 50

23 Escala, salesman 100

The balance of the petty cash account, December 31, 2013, was P 5, 000.

Sales invoices (for cash sales, all in cash, no checks)

Invoices

#2007 December 30 4, 000

#2008 December 31 5, 100

#2009 January 2 3, 050

Required:

Compute the amount of cash shortage. P2, 767

PROBLEM 5

Charlene Companys cash ledger on June 30, 2014 showed a balance of P936, 000 which include
total deposits of P490, 000

Your audit of the cash account revealed the following:

I. Outstanding checks amounted to P29, 000 while deposit in transit totalled P98, 000.
II. NSF checks of P56, 000 had been returned by the bank and were not yet reflected in
the books of the company.
III. Total debits in the bank statement for June amounted to P398, 000 which included the
NSF checks in letter II above, and service fees of P10, 000. The services were
recorded in the conpanys books in the succeeding month.
IV. Sandy Companys check of P15, 000 was charged by the bank to Charlene companys
account.
V. A check of P90, 000 is issued by Charlene company was recorded in its books as
P120, 000.
 Charlene companys cash ledger on June 30, 2014 showed a balance of P936, 000 which
include total deposits of P490, 000.

Required: Based on the results of your audit, determine the following:

1. What is the adjusted cash balance on June 30, 2014? P900

2. What is the cash balance per bank statement on June 30, 2014? P816
3. What is the shortage or overage on June 30, 2014? 0
4. What is the correct total debit in the reconciliation for the bank side on June 30, 2014?
P412, 00
5. What is the total credit adjustment on the Companys cash records on June 30, 2014?
P36, 000

PROBLEM 6

The Nano Company did not exercise adequate internal control over its cash transactions. During
an audit, you found the following data concerning the cash position as of June 30, 2014. On the
companys record the balance of cash on hand and in bank was P34, 700. A credit of P500 for a
note collected by the bank does not appear on the companys records. The bank statement
balance is P27, 000. Outstanding checks are as follows:

Number Amount

1972 P1, 040

1973 720

1974 816

1975 692

The cashier prepared the following reconciliation:

Balance per bank statement P27, 000

Deduct: Outstanding checks

No. 1973 P 720

No. 1974 816

No. 1975 692 2,028

P24, 972
Add: Cash on hand (this count is correct) P9, 228

Collected note 500 9,728

Cash per company records, June 30, 2014 P34, 700

Required:

1. What is the amount of shortage? P2,240

2. How did the cashier attempt to conceal the shortage?
By understating the outstanding checks by 1, 240
Improper treatment of the CM (500*2)

PROBLEM 7

You are engaged to audit the books of HEIDY ENTERPRISES. From the records of the
company, you gathered the following information:

HEIDY ENTERPRISES started operation on October 2, 2014 with HEIDY investing P 150, 000
cash. Monthly bank reconciliation statements have not been prepared; however, bank statements
for October, November, and December were made available to you. The bank statement in
December 2014, showed an ending balance of P30, 500.

Examination of the paid checks disclosed that checks totalling P4, 500 were issued by the
company in December 2014, and were presented for payment only in January 2015. Cash Count
of the cashiers accountability amounted to P8, 500. You were told by the cashier that P5, 000 of
these, in checks, were cash sales on December 29, 2014 deposited on January 3, 2015. The
balance, in currency and coins, represents petty cash fund.

Additional data:

1. Accounts receivable subsidiary ledgers had a total balance of P70, 000 at December 31,
2014.
2. Suppliers unpaid invoices for merchandise totalled P60, 000.
3. The bank statement in October showed a bank credit for P98, 000, dated October 2, 2014.
Inquiry from the cashier disclosed that the amount represents proceeds of a 90-day,
discounted bank note. P80, 000 of this loan was paid by check in December, 2014.
4. Merchandise inventory at December 31, 2014 amounted to P30, 000.
5. Operating expenses paid during the period totalled P180, 000; while merchandise
purchases amounted to P250, 000.
6. The gross profit rate is 40%.
 Required: Compute the cash shortage at December 31, 2014.

PROBLEM 8

Data for the ERNEL COMPANY are assembled as follows:

11/31/2014 12/31/2014
Cash account balance P 1, 000 P 3,790
Bank statement balance 6, 690 10, 350
Deposit in transit 400 600
Checks outstanding 1, 300 1, 500
BSC for month, not shown on the company books 10 40
Bank charges for N.F checks, not shown on the company books 200 300
Collections by bank from ERNEL company customers, not 5, 000 6, 00
shown on the companys books

Tapes for bank statement and company cash data offer the following totals:

Deposit and credit memos per bank statement P 13, 800

Cancelled checks and debit memos per bank statement 10, 140

Cash receipts per cash book 8, 000

Cash disbursement, per book 10, 000

REQUIRED: Prepare a reconciliation of receipts, disbursements, and bank balance for

December.
PROBLEM 9

You have been instructed by your supervisor on an audit of ROBERT Company to prepare a
four-column proof of cash receipts and disbursements for the month of June 2014. The bank
reconciliation statement prepared by the client in May is reproduced below:

May, 2014 Reconciliation

Bank balance 32, 600 Book balance 28,540

Plus Undeposited Collections 500 Plus proceeds of notes

5/31 received collected by the bank in

Total 33, 100 May 3, 500

Less Outstanding Checks Plus deposit made in bank on

140 P 500 May 31 not recorded on books

152 400 until June 100

153 100 1, 000 Total 32, 140

Adjusted Bank Balance 32, 100 Less May bank service

charges 40

Adjusted book balance 32, 100

Upon inquiry about the clients June 30 bank reconciliation, you were informed that it has been
lost and that the client is too busy at this time to prepare another. Your supervisor tells you to get
the June bank statement and paid checks and to prepare the June 30 reconciliation so that you
may complete the June proof of cash. The June bank statement is reproduced below:
 The Philippine National Bank
Account of: ROBERT Company
DATE DISBURSEMENTS RECEIPTS
June 1 400 500
June 7 100
June 10 700 1,000
June 15 200
June 20 600 2, 800
June 27 900
June 29 100 E 100 EC
June 30 10 SC
June30 150 DM

SC-Service charge E-Error

EC-Error corrected DM-Debit Memo

The Debit memo on June 30 represents customer NSF check returned by the bank. The check
was redeposited by the client in the bank on July 1.

Cash received for the period June 21 through June 30 of P3, 500 was deposited in the bank on
July 1.

The paid checks accompanying this bank statement (all clearing in June) were:

No. 152 P 400 No. 154 P 700 No. 157 P 600

No. 153 P 100 No. 155 P 200 No. 158 P 900

The check register revealed that the last check in June was No. 159 for P250 and that Check no.
156 was for P 130.

REQUIRED:

a. Unadjusted Book Disbursements in June 30, 2014.

b. Unadjusted Book Receipts in June 30, 2014.
c. Unadjusted book balance as of June 30, 2014.
PROBLEM 10

Comparative balance sheets for 2014 and 2013 and an income statement for 2014 are provided
below for Angelita Company. Additional information from the accounting records of Angelita is
provided.

Angelita Company

BALANCE SHEETS

December 31, 2014 and 2013 (P in 000)

Assets: 2014 2013

Cash P 1, 800 P1, 125

Accounts receivable 1, 800 1,350

Inventory 2, 700 1,575

Land 2,025 1, 800

Building 2,700 2,700

Less: Accumulated Depreciation (900) (810)

Equipment 8, 550 6, 750

Less: Accumulated Depreciation (1,575) (1,440)

Patent 3,600 4,500

P20, 700 P17, 550

Liabilities:

Accounts payable P 2, 250 P1, 350

Accrued expenses payable 900 675

Lease liability-land 450 0

 Stockholders equity

Common stock 9, 450 9, 000

Paid-in-capital excess of par 2,250 1, 350

Retained earnings 5, 400 4, 500

P20, 700 P17, 550

Angelita Company

Income Statement

For the year ended December 31, 2014 (P in 000)

Revenues:

Sales Revenue P7, 935

Gain sale of land 270 P8, 205

Expenses:

Cost of goods sold P1, 800

Depreciation expense-building 90

Depreciation expense-equipment 945

Loss on sale of equipment 45

Amortization of patent 900

Operating expenses 1, 500 5, 280

P2, 925

Additional information from the accounting records:

a. During 2014, equipment with a cost of P900, 000 (90% depreciated) was sold.
b. The Retained Earnings account shows charges of P 675, 000 and P1, 350, 000 for stock
dividends and cash dividends, respectively.

Required:

1. Collections from customers. P7,485

2. Cash disbursed for purchases. P2,025
3. Net cash provided by operating activities. P4, 185
 4. Net cash used in investing activities. (P2, 160)
5. Net cash used in financing activities. (P 1,350)

MULTIPLE CHOICE QUESTIONS

Questions 1 through 4 are based on the following information:

On January 1, RUTHA CO. established a petty cash account and designates Anhie Reyes as
petty cash custodian. The original amount included in the petty cash fund is P 5, 000. The
following disbursements are made from the fund.

Office supplies P1, 730

Postage 1, 120

Entertainment 420

The balance in the petty cash is P1, 630.

1. The person responsible, at all times, for the amount of the petty cash fund is the
a. Chairman of the Board of Directors
b. President of the company
c. Petty cash custodian
d. General cashier

2. The following are appropriate procedures for controlling the petty cash fund, except
a. To monitor variations in different types of expenditures, the petty cash custodian files
petty cash vouchers by category of expenditure after replenishing the fund.
b. To replenish the fund, the general cashier issues a company check to the petty cash
custodian, rather than cash.
c. To determine that the fund is being accounted for satisfactorily, surprise counts for
the fund are made from time to time by the internal auditor or other responsible
official.
d. Each individual to whom petty cash is paid is required to present signed receipts to
the petty cash custodian.

3. The objective of establishing a petty cash fund is to

a. Cash checks for employees
b. Account for all cash receipts and disbursements.
c. Account for cash sales
 d. Facilitate payment of small, miscellaneous items.

4. What is the effect of not replenishing the petty cash at year-end and not making the
appropriate adjusting entry?
a. A detail audit is essential.
b. The petty cash custodian should turn over the petty cash to the general cashier.
c. Cash will be overstated and expenses understated.
d. Expenses will be overstated and cash will be understated.

Questions 5 through 9 are based on the following information:

Shown below is the bank reconciliation for Fitch Company for November 2013:

Balance per bank, Nov. 30, 2013 150, 000

Add: Deposit in transit 24, 000

Total

Less: Outstanding Check 28, 000

Bank credit recorded in error 10, 000 38, 000

Cash balance per books, November 30, 2013 136, 000

The bank statement for December 2013 contains in the following data:

Total deposits 110, 000

Total charges, including NSF check of P8, 000 and service

Charge of P 400 96, 000

All outstanding checks on November 30, 2013, including the bank credit, were cleared in the
bank in December 2013.

There were outstanding checks of P30, 000 and deposits in transit of P38, 000 on December 31,
2013.

Required:

5. How much is the cash balance per bank on December 31, 2013?
a. 154, 000
b. 150, 000
c. 164, 000
 d. 172, 00

6. How much is the December receipts per books?

a. 124, 000
b. 96, 000
c. 110, 000
d. 148, 000

7. How much is the December disbursement per books?

a. 96, 000
b. 79, 600
c. 89, 600
d. 98, 000

8. How much is the cash balance per books on December 31, 2013?
a. 150, 000
b. 170,400
c. 180,400
d. 162, 000

9. The adjusted cash in bank balance as of December 31, 2013?

a. 141, 600
b. 162, 000
c. 172, 000
d. 196, 000

Questions 10 through 15 are based on the following information:

You have been asked by the proprietor of Novey Company to verify the accountability of the
cashier-bookkeeper, who was allowed to take a vacation leave a few days ago.

a. The bank reconciliation statements prepared by the cashier-bookkeeper are presented

below:
November 30, 3014:
Balance per bank statement P21, 500
Cash on hand 500
Total 22, 000
Outstanding checks:
No. 2520 P2, 000
2521 1, 400
2522 1, 900 (3,300)
 Erroneous bank charge 2, 000
Erroneous bank credit (500)
Book balance P 20, 200
December 31, 2014:
Balance per bank statement P135, 000
Cash on hand 6, 300
Total 141, 000
Outstanding checks:
No. 2674 P 31, 000
2675 10, 300
2676 5, 000 (41, 300)
Erroneous bank charge 3, 000
Erroneous bank credit (600)
Book balance P102, 400

The cash in bank account in the general ledger shows the following debits and credits during
December of 2014:

Cash in bank
Dec. Dec.
1 Balanced 20, 200 1 Checks issued 2, 000
2 Received customers From 4, 500 5 Checks issued 5, 200
7 Received customers From 5, 000 14 Checks issued 31, 000
12 Received customers From 20, 000 24 Checks issued 46, 000
17 Received customers From 30, 000 28 Checks issued 7, 600
23 Received customers From 9, 000
27 Received customers From 70, 000
31 Received customers from 48, 500 31 Balance 102, 400
Total 198, 200 Total 198, 200

b. The following summarized transactions were taken from the bank statement for the
month of December 2014:
Balance, December 1, 2014 P16, 500
Total Bank debits 173, 700
The total credits per bank statement:
Collection of notes receivable 5, 000
Correction of Nov. erroneous bank charge 2, 000
Dec. 10 deposit of Flesh credited in error to Novey 600
Total bank disbursements 65, 200
The total disbursements per bank statement include:
Correction of Nov. erroneous bank credit 500
 Dec. check of Freeze charged in error to Novey 3, 000

c. Cash on hand per count in the early morning of Jan. 2, 2015 amounted to P6, 300.
d. Before leaving his company for one-week vacation, the proprietor had left several signed
blank checks that the cashier-bookkeeper had cashed for his personal use.

Required:

10. What is the cash shortage as of November 30, 2014?

a. 5, 000
b. 7, 000
c. 33, 000
d. 13, 200
11. What is the adjusted cash balance on November 30, 2014?
a. 16, 500
b. 13, 200
c. 20, 200
d. 14, 500
12. The amount of unaccounted receipts in December 2014 is:
a. 11, 000
b. 13, 200
c. 9, 000
d. 15, 100
13. The amount of unrecorded/unsupported disbursements in December 2014 is:
a. 15, 100
b. 10. 900
c. 7, 000
d. 5, 000
14. What is the total cash shortage as of December 31, 2014?
a. 26, 000
b. 15, 100
c. 33, 000
d. 7, 000
15. What is the adjusted cash balance on December 31, 2014?
a. 102, 400
b. 125, 000
c. 87, 400
d. 11, 400