Search for any money or money or its equivalent paid for goods or services at the time

of purchase or delivery. TRUE

Cash is to be measured at its face value

Nated in foreign currencies to be translated at the exchange rate on the balance

sheet date

Cash in financial institutions which are in bankruptcy or financial difficulty must be

measured and its estimated realizable value and not at its face value

Cash is the most liquid of all assets

Cash is usually presented as the first line item in the balance sheet

Cash equivalents are investments which mature within a short period of time normally
three months or less from the date of acquisition

Responsibilities should be given to one person only. FALSE.There should be segregation

of duties

All cash receipts must be deposited intact and all disbursements must be made through
checks

Small disbursements should be handled through a petty cash fund

Only merchandising and manufacturing businesses are concerned with cash but not
serves businesses. FALSE
The bank statement shows the beginning and ending balance of cash together with
the receipts and disbursements for the period

Post dated checks issued by the company is still considered to be cash of the company

Cash is an essential ingredient for a business to survive grow and expand

Top view of the company the cash in bank account is an asset

Post dated checks issued by the company should still be part of the cash and there has
to be accounts receivable from that creditor. FALSE

Cash refers to money and other negotiable instruments payable in money which is
acceptable by a bank or other financial institution for deposit at its face value.

From the point of view of the bank the cash of the company is a liability account.

A stale check is a check that was not cashed or deposited by the pay within 6 months
from the date of the check

Cash on hand refers to the undeposited cash collections

Cash count should not be announced in order for the custodian to hide his shortages

Entry to record the establishment of the fund would be debit to petty cash fund
No journal entry is to be made for the day-to-day disbursements of a business using a
petty cash fund

Differences may occur between the company's cash records and the records of the
bank due to errors only. FALSE

Deposit in transit are collections that are recorded by the company but has not yet
been recorded by the bank

Proceeds of a bank loan is an example of a credit memo

Credit memos are to be added in the unadjusted balances per book

Bank service charges and NSF checks are considered to be debit memos

Only the bank can make errors. FALSE

It is never possible that differences may occur between the company's cash records
and the records of the bank. FALSE

A customer's stale check is no longer cash

Cash on hand would include bills currencies and coins

Errors but also timing differences can be source of differences between the records per
book and per banks
A customer's stale check should be added back to accounts receivable

Cash items awaiting deposit would include customers checks travelers checks and
stale checks. FALSE stale checks

Deposits in transit are those collections already recorded by the company as cash
receipts but has not yet been reflected on the bank statement

Bank drafts are considered as cash and also postal money orders

Deposits in transit with include those items that did not reach the bank on time

A company drawn stale check should be added back the accounts payable

Cash in bank includes those currency deposits that are in philippine pesos only. FALSE

Outstanding checks are the checks that are not yet recorded as disbursed by the
company but has already been reflected as such in the bank statement. FALSE,
already recorded in BOOK but NOT IN BANK

Compensating balances are the minimum amount that a company agrees to maintain
in a bank account in connection with a loan or borrowing arrangements the bank

Cash in bank that are restricted as to withdrawal is considered to be cash. FALSE

A certified check is one where the bank has already accepted the check as proof of
sufficiency of funds
If the compensating balance is not legally restricted, it should be classified as cash

Cash in banks may be savings account or checking accounts

For bank reconciliation purposes, certified checks are also considered as a part of the
outstanding checks. FALSE

The compensating balance is legally restricted as to draw all the amount restricted
should be classified as a noncurrent if the related loan is long term.

Checking accounts differ from savings account in their manner of withdrawal

Credit memos our items representing deposits which are credited by the bank to the
account of the company but the same has not yet been recorded by the company as
a cash receipt

Cash set aside for a specific purpose is to be reported as part of cash if it pertains to
current operations

Cash in working funds are cash funds established by the company for use in the current
operations

An example of a credit memos proceeds of a bank loan

The purpose of a cash set aside for a specific purpose is to pay for long-term liabilities or
purchase of fixed assets then it should be reclassified as non current asset and not as
cash

A petty cash fund is an example of a working fund

Another example of a debit memo is a technically defective check

Cash equivalents are short-term and highly liquid investments that are readily
convertible into cash and acquired three months before maturity date

Change payroll fund dividend funds are considered to be working funds but not tax
funds. FALSE

Debit memos are items that are not yet recorded by the book as disbursements

Bank overdraft is a credit balance in cash in bank account

Cash is valued at its face value

Bank service charge would include the penalties and the cost of the check books

A compensating balance which is legally restricted and related to a short-term loan is

classified as a current asset

Cash denominated in foreign currency should be translated to philippine peso at the

exchange rate on the balance sheet

Nsf means no sufficient funds

Unreleased checks are restored to the cash balance most of the time. FALSE
Cash in banks which are in bankruptcy must be measured at realizable value

The amount of money written in a check can always be withdrawn at the date
indicated there in. FALSE, there is PDC

The petty cash fund under the imprest fund system is only debited when is created and
replenished. FALSE

Cash is the most liquid of all assets

Technically defective checks would include checks with alterations and inconsistencies

An nsf check will not require an adjusting entry on the depositor's book. FALSE

Being the most important of all the assets should be the last account to be presented at
all times. FALSE

We have three forms of bank reconciliation methods and these are the adjusted
balance method, book to bank, and bank to book

There is always credit memo if the cash balance per books is less than the cash
balance per bank. FALSE

Cassian be the first line item in the income statement. FALSE , balance sheet

Under the adjusted balance method the book and bank balance are brought to the
correct cash balance
When the practice of opening the books of account beyond the close of the
accounting period for the purpose of showing a better financial position and
performance

Cash equivalents are those investments that mature within a short period of time
normally three months or less from the date of acquisition

Under the adjusted balance method the deposits in transit are added to the balance
per bank

Laughing consists of misappropriating a collection from one customer and concealing

this defalcation when collection is made from another customer

Kitting is a transfer of cash from one bank to another bank keeping is usually employed
at the end of the month

It is the stockholders of the company that sets the policy to determine which
investments are treated as cash equivalents. FALSE

The adjusted balance method is the most preferred method of bank reconciliation

Cash available for a specific purpose to be disbursed to days from the balance sheet
date should now be classified as cash in the balance sheet. TRUE

Cash and cash equivalents should be presented separately. FALSE

Credit memos are deducted from balance per books under the adjusted balance
method. FALSE
Cash set aside and restricted for current periods payroll should not be classified as cash
in the balance sheet. FALSE

The usual presentation of Assets is in the order of profitability

Deposit in transit outstanding checks and errors or also known as bank reconciling items

Checks on hand, dated a day before balance sheet date should be considered as
cash

A 2 month treasury bill is an example of a cash equivalent

Debit memos, credit memos, and errors are known as book reconciling items

Stale checks issued by the company should still be included in the cash account

Cash is very easy to steal or miss appropriate

The book to bank methods purpose is to make the necessary adjustments to the
balance of cash per company's books to make it equal to the balance per bank
statement

Post dated checks from customers should not be included as cash rather it should be
classified as accounts receivable

The responsibilities for custody record keeping and authorization of cash should all be
given to one person only. FALSE
In the book to bank credit memos are deducted from the book balance

Deposits in a foreign bank account which are subject to restrictions should be reported
separately as a current asset with appropriate disclosure. FALSE

All cash receipts must be deposited intact in the same form and on the same week.
FALSE, same day

In the book to bank method deposits in transit are deducted from the book balance

Only highly liquid investments that will mature within three months from the balance
sheet date will qualify as cash equivalents. FALSE

All disbursements should be made through cash only. FALSE

In the bank to book method debit memos are added to the bank statement balance

Shares of stock of another corporation acquired that leads three months before
balance sheet date should be classified as cash equivalents. FALSE, before maturity
date

Small expenditures should be handled through a petty cash fund

In the bank to book method the outstanding checks are added to the bank statement
balance. FALSE

Use the voucher system for cash disbursements this should be signed by lower-level
manager. FALSE
One possible error to be made regarding cash is the over statement of receipts
recorded in the books.

Monthly bank reconciliations are made four times a year. FALSE

Adjusting entries are to be prepared for both book and bank reconciling items. FALSE

In preparing bank reconciliation bank service charges should be deducted from the
balance per book and the balance per bank statement. FALSE, in book only; deducted
in bank already

Cash counts and internal audit of cash transactions should always be announced.
FALSE

Cash in foreign currency should be translated using the exchange rate on the balance
sheet date. FALSE, converted

The main reason for the discrepancy between the bank statement and a cash records
of the depositor is the timing differences of cash transactions between the depositors
records and the bank record

A jeepney fare is an example of a disbursement from the petty cash fund

Cash and closed banks should be classified as accounts receivable

For reconciling errors, the rule is the one who makes the error should be the one who
make a correction in records
Example of a disbursement from the petty cash fund is the purchase of a delivery truck.
FALSE

Cash accounts in the philippines are insured with the pdic up to the amount of 350,000
per depositor

"Book to Bank" Bank reconciliation with end with the adjusted balance of both the
records per book and per bank

Petty cash fund was instituted because making use of checks would seem to be
impractical for some expenditure

Customers check if properly dated is to be considered as cash

Certificates of deposit and money market savings certificates are examples of time
deposits

Only one way to account for a petty cash fund it is called the imprest fund system.
FALSE, fluctuation also (though not used)

A post dated check from a customer can also be considered as cash. FALSE, accounts
receivable

Demand deposits would include amounts in checking and savings accounts

The CFO is the one responsible in maintaining the petty cash fund. FALSE, petty cashier

Deposits in foreign banks are always reported as receivable. FALSE

The entry to record establishment of the petty cash fund with include and debit to petty
cash fund and credit to cash in bank

Post dated checks are still considered to be receivables from customers

Cash overdraft should be reported as a current liability

Petty cash voucher is to be filled up by the custodian stating the day, amount
requested, and the purpose of the expenditure

DAUD check means drawn against uncleared deposits

Restricted compensating balance requirements as a result of short-term financing

arrangements are reported separately in the current asset section of the balance sheet

The voucher is submitted for approval of higher level of management

Nsf means no sufficient funds

Bank reconciliation should be prepared by the individual responsible for cash receipts
and disbursements. FALSE

What the paid petty cash vouchers and the remaining currencies and coins should be
equal with imprest fund balance of the petty cash fund

The DAIF checks are to be classified as receivables and not cash

In a bank reconciliation statement the amount of insufficient funds check must be
deducted to the depositors cash balance in determining the correct cash balance

When the fund is already depleted the custodian needs to make a replenishment of
the petty cash fund

Iou from employees are considered as cash because they can be offset from the salary
of the employee. FALSE

In a bank reconciliation statement, an outstanding check must be subtracted from the

bank statement balance in determining the correct cash balance. true for me

Under the imprest fund system, a debit to an expense account should be made during
the day to day release of the funds when the petty cash fund. FALSE

What are the proper classification of advances for employee travel and so is travelers
checks. FALSE

The cash balance is low the company is said to be liquid. FALSE

The initial balance of the petty cash fund can no longer be increased or decreased in
the future. FALSE

Postage stamps and postal money orders are not considered as cash because they
came from the post office and not from banks. FALSE

Short or over account is a temporary account

Under the imprest fund system disbursement from the petty cash fund are recorded
only a upon replenishment

A bank overdraft happens when the depositor has drawn checks for a sum lesser than
the amount in the bank account. FALSE, more than the amount

Errors never happen it is always the bank that makes mistakes. FALSE

Cash short or over account is an example of a suspense account

A bank overdraft is to be properly classified as a non current liability with that bank

Bank service charges are added to the bank balance to arrive at the adjusted cash
balance. FALSE

The cash short or over account is closed to a receivable from employee account if the
shortage remains unsolved. FALSE, receivable if because of petty cashier but loss if
remains unsolved

In cases of a bank overdraft , in the depositor as another account in the same bank
and the right of offset exists , he can report the net amount on the balance sheet

A petty cash system is designed to disburse cash for personal reasons of the proprietor.
FALSE

Miscellaneous expense account will be used if it was discovered that it was petty cash
custodian who misappropriated the amount. FALSE, if unresolved

Undelivered or unreleased checks are still considered as cash

A preferred stock redemption fund is considered to be cash

The company's cash is deposited in a bank account as part of its control over cash

Recorded but undelivered checks are added back to cash and to accounts
receivable. FALSE, and to accounts payable

Banks will return a check to the maker if the amount is too small. FALSE, if amount is
insufficient
I
fthecashf
undi
ssetasi
def
orusi
ncur
rentoper
ati
onsi
sacur
rentasset

Examplesofsuchf
undar
epet
tycashf
undpay
rol
lfundt
rav
elf
undi
nter
estf
unddi
vi
dendf
und
andtaxfund

Ontheotherhandift
hecashf undissetasidefornoncur
rentpurposesiti
sshownasl ong-
ter
m
i
nvestmentexamplesofsexualorsinkingf
undprefer
redredemptionfundcont
ingentf
und
i
nsurancefundandfundforacquisi
tionorconstr
ucti
onofproper
typlantandequipment

Whati
sthebasi
crequi
rementf
orcashandcashequi
val
ent
s?

Unr
est
ri
ctedi
nusef
orcur
rentoper
ati
ons

Ifmateri
aldeposi
tsandfor
eignwhi
char esubjectt
oforei
gnexchangedescr
ipt
ionshal
lbe
classi
fi
edseparat
elyasnoncurr
entassetwithappropr
iat
ediscl
osure

Noti
ncl
udedi
ncash-
-pastduepr
omi
ssor
ynot
eissuedi
nfav
oroft
heent
it
ybyt
hepr
esi
dent

I
nrei
mbur
singt
hepet
tycashf
undwhi
choft
hef
oll
owi
ngi
str
ue?expenseaccount
sar
edebi
ted

Whi
choft
hef
oll
owi
ngst
atement
sinr
elat
iont
oani
mpr
estpet
tycashi
sincor
rect
?

Thepet
tycashaccounti
sdebi
tedwhent
hef
undi
srepl
eni
shed

Whenanimprestpet
tycashfundisusedwhi
chofthefol
lowi
ngstatementsi
str
ue?
i
mbursementofthepet
tycashfundshoul
dbecredi
tedtothecashaccount

Whichofthefol
lowingstat
ementsinr
elat
iontot
hecashshor
toroveraccountistr
ue?The
ent
rytoaccountfordai
lycashsal
esforwhichasmal
lamountofcashshortageexi
stedwoul
d
i
ncl
udeadebi tt
ocashshor torov
eraccount
Reconci
l
iat
ioni
saschedulet
hataccount
sforthedi
ff
erencesbet
weenanenti
ty'
scashbal
ance
asshowninthebankst
atementandthecashbal
anceshowninthegener
all
edger

Thecashbalanceshowni ntheaccount
ingr
ecor
dsislesst
hanthecor
rectcashbal
anceand
nei
thert
hem totaylorthemanhasmadeanyer r
orst
heremustbedeposit
scredi
tedwit
hthe
bankbutnotyetrecordedbyenti
ty

Whichoft hefoll
owingwouldnotrequi
reanadjust
ingentr
yonthedeposi
tor
'sbook?deposi
tof
anotherenti
tyiscredi
tedbythebanktotheaccountofthedeposi
tor

Bankstat
ement
spr
ovi
dei
nfor
mat
ionaboutal
loft
hef
oll
owi
ngexcepter
ror
smadebyt
he
deposi
tor

Whi
choft
hef
oll
owi
ngst
atement
sinr
elat
iont
oacer
ti
fi
edchecki
sfal
se?

acer
ti
fi
edchecki
sonedr
awnbyabankuponi
tsel
f

Aproofofcashshoul
dbeusef
ulf
ordi
scov
eri
ngcashr
ecei
ptst
hathav
ebeenr
ecor
dedbuthav
e
notbeendeposi
ted

Whichoft
hefol
l
owi
ngi
temswi
l
lbeaddedt
othemov
ement
sandbankr
econci
l
iat
ion?I
nter
est
pai
dbythebank

I
nprepar
ingbankr
econci
l
iat
ion,
int
erestpai
dbyt
hebankont
heaccounti
saddedt
othebook
bal
ance

Whenpr
epar
ingabankr
econci
l
iat
ion,
bankcr
edi
tsar
eaddedt
othebal
anceperbook