MAPUSAO, MARK CEASAR J.

BA3DB

AE15-IA1 – TASK FOR FULL DISTANCE LEARNING (FDL)-Module 1 to Module 5

A. Fill in the blanks with the correct answer.
CASH 1. Is the money in the form of currency.
CASH EQUIVALENTS 2. Are investments that can be readily converted to cash
PETTY CASH FUND 3. Is a small amount of company cash, often kept on hand to pay for minor or
incidental
expenses, such as office supplies or employee reimbursements.
IMPREST SYSTEM 4. Is a system of control of cash which requires that all cash receipts should be
deposited
intact, and all cash disbursements should be made by means of check.
BANK OVERDRAFT 5. It is the results of issuance of checks in excess of the deposits.
RECONCILING ITEMS 6. A difference between balances from two sources that are being compared.
BANK DEPOSITS 7. Consist of money placed into banking institutions for safekeeping. These
deposits are
made to deposit accounts such as savings accounts, checking accounts, and money
market accounts.
BANK RECONCILIATION 8. A statement which brings into agreement the cash balance per book and cash
balance per bank.
BANK STATEMENT 9. A monthly report of the bank to the depositor showing the cash balance per
bank at the beginning, the deposits acknowledged, the checks paid, other
charges and credits and the daily cash balance per bank during the month.
BOOK BALANCE 10. It is a company cash balance according to its accounting records.

Questions: Classify each item as: (1) an addition to the book balance, (2) a subtraction from the book
balance, (3) an addition to the bank balance, or (4) a subtraction from the bank balance.
The following items could appear on a bank reconciliation:

1. Interest earned on bank balance, P200. AN ADDITION TO THE BOOK BALANCE

2. Deposits in transit, P1,500. AN ADDITION TO THE BANK BALANCE
3. Service charge, P10. SUBTRACTION FROM THE BOOK BALANCE
4. The bank incorrectly decreased the business
account by P350 for a check written by another
business. AN ADDITION TO THE BOOK BALANCE
5. Bank collection of note receivable of P800, and interest of P80. AN ADDITION TO THE BOOK BALANCE
6. NSF check from customer, #548, for P1,750. SUBTRACTION FROM THE BOOK BALANCE
7. Outstanding checks, P6,700. AN ADDITION TO THE BOOK BALANCE
8. The business credited Cash for P200. The correct amount was P2,000. SUBTRACTION FROM THE
BOOK BALANCE

B. Answer the following questions.

1. What is a Proof of Cash?

Proof of cash is basically a reconciliation of the cash receipts as per the cash receipts journal and the
cash deposited at the bank. It is carried for both the beginning and the ending period cash balance.
2. What is a Banks Debit & Bank Credit?
Bank debit is when you deposit your money to the bank and Bank Credit is when you borrow money
from the bank.
3. What is a Book Debit & Book Credit?
It refers to cash receipts or all items that are debited to the bank account's cash are referred to as book
debits and book credits refers to all goods credited to the cash in bank account or cash disbursements.
4. Give the formula for computation of book balance
Balance per book-beginning of the month
Add: Book debits during the month

TOTAL:
Less: Book credits during the month
Balance per book- end of month

5. Give the formula for computation of bank balance.

Balance per bank- beginning of month

Add: Bank credits during the month

TOTAL:
Less: Bank debits during the month
Balance per bank- end of month

C. Answer the following questions.

6. What are the methods of recording credit sales?
A. Gross methods – Sales and accounts receivable are both reported at the invoice's gross amount. Due
to its ease of use, this approach is popular and frequently employed.
B. Net method –The net amount of the invoice, or the invoice price less the cash discount, is used to
record sales and accounts receivable.
7. What are the terms related to freight charges?
A. FOB Destination- Indicates that upon receipt of the acquired items, the buyer acquires ownership of
them. The seller will be responsible for carrying the freight charge to its final destination.
B. FOB Shipping point – It indicates that upon shipment of the purchased goods, ownership passes to
the buyer. The cost of moving the charge from the place of shipment to the point of destination will be
covered by the customer

8. What are the methods for accounting for bad debts?

There are two approaches used to account for bad loans. It is both the Direct-off technique and the
allowance approach.

D. Answer the following questions.

Uncollectible accounts expense is estimated at ¼ of 1% of net sales of P4,000,000 for the year.
The current balance in Allowance for Doubtful Accounts is P300 credit.

Determine the following:

a) The uncollectible accounts expense for the year.
4,000,000 X 1% X ¼ = ₱10,000
b) The adjusting entry to be made on December 31.
Uncollectible Account Expense ₱10,000
Allowance for uncollectible account 10,000
c) The balance in Allowance for Doubtful Accounts after adjustment.
₱300 + 10,000 = ₱10,300 credit balance