Is not generally accepted
AE 111 Midterm Formative Assessment
Is debited when the petty cash fund
1 proves out over
Is debited when the petty cash fund
Assessment Proper
proves out short
28 of 40 points
Highly liquid investments are cash Is a contra account to cash
equivalents if the maturity is 90 days or
less *
Correct answer
Is debited when the petty cash fund
From the date the investments are proves out short
acquired
From the end of reporting period Which of the following is usually
considered as cash? *
From the date of issue of financial
statements Certificate of deposit
From the beginning of reporting Checking account
period
Money market certificate
Correct answer
From the date the investments are Postdated check
acquired
Correct answer
Cash equivalents are * Checking account
Treasury bills and money market Restricted deposits in foreign bank are
instruments
classified as *
Investments with original maturity of
three months or less Current asset with appropriate
disclosure
Readily convertible into known
amount of cash Noncurrent asset with appropriate
disclosure
All of the other statements are
features of cash equivalents Be written off as loss
As part of cash and cash equivalents
A cash short or over account *
Compensating balance represents * Redeemable preference shares due in
60 days
Fund in a bank account that cannot be
Commercial papers due for
spent
repayment in 90 days
Balance in a payroll checking account
Equity investments
Account that is subject to bank
A bank overdraft
service charge
Account on which a bank pays Which of the following should not be
interest considered cash? *
The internal control feature specific to Petty cash fund
petty cash is *
Money order
Separation of duties
Coins and currency
Assignment of responsibility
IOU
Proper authorization
A compensating balance *
Imprest system
Must be included in cash and cash
Correct answer equivalents
Imprest system
Which is legally restricted and related
to a long-term loan is classified as
Petty cash fund is * current asset
Separately classified as current asset Which is legally restricted and related
to a short-term loan is classified
Money kept on hand for making separately as current asset
minor disbursements of coin and
currency rather than by writing Which is not legally restricted as to
checks withdrawal is classified separately as
current asset.
Set aside for the payment of payroll
Correct answer
Restricted cash Which is legally restricted and related
to a short-term loan is classified
separately as current asset
All of the following can be classified as
cash and cash equivalents, except *
All of the following may be included in High grade marketable equity
investments
cash, except *
BSP treasury bills
Currency
Commercial papers
Money market instrument
What is the major purpose of an imprest
Checking account balance
petty cash fund? *
Savings account balance
To effectively plan cash inflows and
outflows
A cash equivalent is a short-term,
highly liquid investment readily To ease the payment of cash to
convertible into known mount of cash vendors
and *
To determine the honesty of the petty
cashier
Is acceptable as a means to pay
current liability
To effectively control cash
disbursements
Has a greater current fair value
Bears a prime interest rate Correct answer
To effectively control cash
Is so near maturity that it presents disbursements
insignificant risk of change in interest
rate Which statement is true about reporting
bank overdraft under IFRS? *
Technically, cash may not include *
Overdraft typically cannot be offset
Foreign currency against positive balance in other cash
account but reported as current
Money order liability
Restricted cash Generally, cash overdraft is not
allowed
Undeposited customer check
Overdraft can be offset against other
bank account when payable on
Cash equivalents do not include * demand and often fluctuates from
positive to overdrawn as an integral
Money market funds part of cash management
All of the other statements are true
about bank overdraft
Which of the following should not be
included in cash? *
Travel cash advance
Certified check
Personal check
Manager’s check
The imprest petty cash fund account is
debited *
Only when the fund is created
When the fund is created and every
time it is replenished
When the fund is created and when
the size of the fund is increased
When the fund is created and when
the size of the fund is decreased
What is a compensating balance? *
Saving account balance
Demand deposit account balance
Temporary investment as collateral
for a loan
Minimum deposit required to be
maintained in connection with a
borrowing arrangement
