I.

DEFINITION
Other negotiable instruments that can be used to settle obligation and are readily available for unrestricted us
restrictions, contractual or otherwise (Millan, 2019 p.36)
Cash equivalent - are "short term, highly liquid investments that are readily convertible to known amounts
changes in value because of changes in interets rate." (PAS 7.6)
Only debt securities acquired within 3 months or less before maturity can qualify as cash equivalents
Equity securities cannot qualify as cash equivalents because shares do not have a maturity date.
acquired three months before the redemption date can qualify as cash equivalent.

II. RECOGNITION
An entity shall classify an asset as current when the asset is cash or cash equivalent UNLESS
the reporting period. (PAS 1.66)

GENERAL RULE: The item should be unrestricted for use

III. MEASUREMENT
1. Cash - measured at face amount (face value)
2. Cash
Note: If adenominated in foreign
bank or financial currency
instituition is translated
holding the funds at
of the current
an entity is inexchange rate
bankruptcy or at the reporting
financial difficulty,date
amount recoverable is estimated to be lower than the face value

IV. EXAMPLES:
Examples of Cash:
CASH ON HAND CASH IN BANK CASH FUND
Undeposited collections: Company's own: For current purpose:
Coins and currencies Savings account
Checking/Current/Demand- Petty Cash fund
Customer's Personal Check deposit account Revolving fund
Cashier's check Foreign currency deposit Payroll fund
Manager's check Compensating balance Change fund
Traveler's check Undelivered
Delivered checks or
but Post-dated Dividend fund
Bank drafts Stale checks Interest fund
Money orders Tax fund
Travel fund

Examples of Cash Equivalent

Things to Remember Included as Cash Equivalent
Convertible into cash easily Three-month Treasury Bill
Acquired not more than three months
90-Day Money Market Instrument
Short-term 90-day commercial
Onre-year Treasury billpaper
acquired
Highly liquid investments three months

V. ACCOUNTING RULES:
1. Pension fund
a. General: Noncurrent Investment
b. Exception: If relate dliability is current, CASH

2. Contignent fund
a. General: Noncurrent investment

3. Insurance fund
a. General: Noncurrent investment

4. Sinking fund
a. General: Noncurrent investment
b. Exception: CASH, if related bonds is current

5. Deposit in Foreign Bank

a. Cash if UNRESTRICTED
b. Noncurrent receivables if resitrcted and material

6. Cash for PPE acquisition

a. Noncurrent asset

7. Bank overdraft
a. Different banks
i. General: Current liability
ii. Exception: netted against other accounts if immaterial and part of cash management
b. Same banks: May be offset against each other positive accounts except restricted accounts
i. Bank overdraft netted against Cash in Bank is added back to correct the Cash in Bank balance

8. Compensating balance
a. Not legally restricted (also when the problem is silent) - CASH
b. Legally restricted - not included in Cash

9. IOU
a. General: Receivable

10. Redeemable Preference Shares

a. CASH EQUIVALENT acquired three months before redemption

11. Undelivered/Stale/Postdated checks

a. Added back to cash of payor
i. If the stale check is immaterial, it is treated as miscellaneuous income

12. Accounting for Petty Cash Fund:

maintained - fluctuating -
Periodic FUND OPERATION/ STAGES Perpetual
Entries: Entries:
Petty Cash Fund xx Petty Cash fund xx
Establishment of the fund
Cash in Bank xx Cash in Bank xx
Memo in Petty Cash Journal Various expenses xx
Disbursements
Petty Cash Fund xx
Various expenses xx Petty Cash Fund xx
Cash in Bank xx Replenishment Petty Cash
Cash in Bank xx
(Equal to Petty cash Disburseme Disbursement)
Various expenses xx
(WithPetty Cashentry
adjusting Fundsubject
xx to End of the Period Without adjusting entry
reversal)

a. Not included in Petty Cash Fund:

i. Bills and coins and customer's check from cashier's collections should be in general cash
ii. Checks issued by clients in payment of utility bills should have been delivered to the payees
iii. Checks issued to the client in payment of personal advances should be included in general cash

13. Bank Reconciliation

- a process that brings into agreement the cash balance per book and cash balance per bank
- a bank reconciliation statement is usually prepared monthly because the bank provides the depositor with the ban

A. Reconciling items: Receivables collected by

the bank of loan directly
Proceeds
+ CREDIT MEMOS credited by to
transferred thecurrent
bank
account
NSF/DAIF Checks
Technically defective
Book reconciling items
checks
- DEBIT MEMOS
Bank
An service charges
automatic debit of
loan payment
+/- Book error

+ Deposit in Transit
Bank reconciling items - Outstanding checks
+/- Bank errors

B. Reconciliation Methods:
Adjusted Balance Method
Book-to-Bank Method
The unadjusted cash balance per ledger and the unadjusted bank
statement balances are simultaneously adjusted
UNADJ. BOOK + CM - DM +/- BOOK ERRORS - UNADJ. BANK + DIT
-adjusted
OC +/- BANK ERRORS
balance, works back the undjusted bank balance that is
reflected in the bank statement
 Book-to-Bank Method
Bank-to-Book Method
UNADJ. BOOK + CM - DM +/- BOOK ERRORS +/- BANK ERRORS +
OC
from- the
DITadjusted
- UNADJ. BANK works back the unadjusted book balance
balance,
that is reflected in the company's ledger
UNADJ. BANK + DIT - OC + BANK ERRORS +/- BOOK ERRORS +
DM - CM - UNADJ. BOOK

14. Proof of Cash

-- a
a proof
four-column expanded,
of cash is essentiallytwo-period bank
a roll forward reconciliation.
of each line item in Its purpose
a bank is to discover
reconciliation formpossible discrepancies
one accounting periodintoc
incorporating separate columns for cash receipts and cash disbursements. The columns (and formula) used for pro

PROOF OF CASH STATEMENT - Cash disbursements

Beginning Balance + Cash receipt for the period for the period
which may therefore require further investigation, and perharps some adjusting entries. A proof of cash can indica
other reconciliation issues that will require adjustments to a company's accounting recorfs, including the f
- Bank fees not recorded
- Not sufficient fund checks not deleted from the deposit records
- Interest income or interest expense not recorded
- Checks or deposits recorded by the bank in different amounts than what they were recorded by the company
- Checks cashed by suppliers that the company voided
- Cash disbursements and/or cash receipts recorded in the wrong account

VI. FINANCIAL STATEMENT PRESENTATION:

Cash and cash equivalents are disclosed as one and first line item in the current asset section on the face of t

VII.entity
An DISCLOSURE REQUIREMENTS
shall disclose the components of cash and cash equivalents and shall present a reconcilciation of the am
statement of cash flows with the equivalent items reported in the statement of financial position
adily available for unrestricted use may form part of cash, and not be subject to any

y convertible to known amounts of cash and which are subject to an insignificant risk of

y as cash equivalents
ot have a maturity date. However, preference shares with a specified redemption date and
uivalent.

alent UNLESS it is restricted to settle a liability for more than 12 months after the end of

e rate
ptcy or at the reporting
financial difficulty,date
cash should be written down to estimated realizable value if the
ricted accounts
h in Bank balance
Bank xx

sh Fund xx

Bank xx

eneral cash
d to the payees
ded in general cash

ance per bank

provides the depositor with the bank statement at the end of every month

e unadjusted bank
d
S - UNADJ. BANK + DIT
nk balance that is
S +/- BANK ERRORS +
djusted book balance

+/- BOOK ERRORS +

discover
ation formpossible discrepancies
one accounting periodintocash
the next,
columns (and formula) used for proof of cash are:

= Ending balance
entries. A proof of cash can indicate an array of
ccounting recorfs, including the following:

were recorded by the company

rrent asset section on the face of the balance sheet

l present a reconcilciation of the amounts in its

nt of financial position (IAS 7.45)
- Share investments cannot be used because it is actively traded in stock market
BANK TO
UNADJ. BOOK
BANK METHOD
+ DIT - OC + BANK ERRORS +/- BOOK ERRORS +
DM - CM - UNADJ. BOOK

BOOK TO BANK METHOD

UNADJ. BOOK + CM - DM +/- BOOK ERRORS +/- BANK ERRORS + OC - DIT - UNADJ. BANK
1.)
Cash 3,400,000

2.)
Government treasury bills 2,000,000
Commercial papers 1,500,000
Cash equivalents 3,500,000

Cash on hand (100k - 20k) 80,000

Cash in Bank - current (350k + 100k) 450,000
Cash in Bank - peso savings (2M - 340K - 250K) 1,410,000
Cash in bank - dollar deposit unrestricted (100k x 400 4,000,000
Cash in a money-market account 250,000
Treasury bill 800,000
Redeemable PS 370,000
Cash and cash equivalent 7,360,000

Don't consider since it is for 20x2

a.) Corrected balance of petty cash fund
Bills and coins 2,450
Petty cash voucher July 1-4 800
Petty cash fund balance, adj. 3,250

b.) Cash shortage or overage

Bills and coins 2,450
Petty cash voucher June 2022 3,300
Petty cash vocher July 1-4 800
IOUs 1,400
Drawn by Juvy 2,000
Total 9,950
Petty cash fund, per ledger -10,000
Cash shortage -50

3.) Adjusting entry, June 2022

Miscallenous expense 3,300
Receivable from Employee 3,400
Cash shortage 50
Petty cash fund 6,750

Balance per bank statement 2,000,000

Deposit in Transit 200,000
Outstanding check -400,000
Erroneous bank credit -300,000
Adjusted bank balance 1,500,000

Balance per book 850,000

NSF check -100,000
Proceeds of note collected by bank -750,000
Adjusted book balance 1,500,000

The certified check of 100,000 is no longer outstanding for reconciliation purposes. Thus, the amount is deducted fr
NSF checks of 50,000 are already deposited and cleared on December 27
DIT - UNADJ. BANK

Nierva Services Inc.

Four Column Reconciliation
November 30 December 31, 2024
+ - =
Nov 30 Receipts Disbursements Dec 31
Balances per bank statement 294,771 1,065,620 1,211,405 148,986
Receipts not yet deposited:
Nov 30 21,270 -21,270
Dec 31 32,925 32,925
Outstanding checks:
Nov 30 -40,525 -40,525
Dec 31 35,191 -35,191
Erroneous charge by bank -625 625
Correct balances 275,516 1,077,275 1,205,446 147,345

Balances per books 270,311 1,072,850 1,195,536.50 147,625

Bank service charges:
Nov 30 -295 -295
Dec 31 158 -158
Interest credit by bank:
Nov 30 5,500 -5,500
Dec 31 4,925 4,925
Uncollectible customer's check 5,947 -5,947
NSF returned and redeposited in Dec 5,000 5,000
Check #137412 recorded 3,200 for 2,300 -900 900
Correct balances 275,516 1,077,275 1,205,446.50 147,345
hus, the amount is deducted from the total amount of outstanding checks
1. To be reported as part of cash and cash equivalents, the cash and cash equivalent must be:
a. Unrestricted in use for current operations.
b. Available for the purchase of property, plant and equipment.
c. Set aside for liquidation of long-term debt.
d. Deposited by bank.

2. All of the following can be classified as cash and cash equivalents, except:
a. Redeemable preference shares acquired and due in 60 days
b. Commercial paper held and due for repayment in 90 days
c. Equity instrument
d. Bank overdraft

3. Unreleased checks, which are checks drawn before the end of reporting period but held for later delivery
a. Shall be treated as outstanding checks if the date is shortly after the end of reporting period
b. Shall be restored to the cash balance.
c. Shall be treated as outstanding checks if they are ultimately encashed.
d. Shall be treated as outstanding checks

4. The petty cash fund account under the imprest fund system is debited
a. Only when the fund is created.
b. When the fund is created and everytime it is replenished.
c. When the fund is created and when the size of the fund is increased.
d. When the fund is created and when the size of the fund is decreased.

5. A cash short or over account

a. Is a contra account for cash.
b. Is debited when the petty cash fund proves out short.
c. Is not generally accepted.
d. Is debited when the petty cash fund proves out over.

6. Cash must be safe-guarded because it is most susceptible asset.

a. True
b. False

7. It is a two-date reconciliation that consider adjusting the receipts and disbursements for a certain period
a. Bank reconciliation
b. Bank statement
c. Proof of cash
d. Cash vouchers

8. Which of the following must be deducted from the bank statement balance in preparing a bank reconcilia
a. Deposit in transit
b. Outstanding check
c. Reduction of loan charged to the account of the depositor
d. Certified check

9. The following statements relate to cash. Which statement is true?

a. The term cash equivalent refers to demand credit instruments such as money order and bank drafts
b. The purpose of establishing a petty cash fund is to keep enough cash on hand to cover all normal operating expe
c. Classification of a restricted cash balance as current or noncurrent should parallel the classification of the related
d. Compensating balance required by a bank should always be excluded from cash and cash equivalents

10. The internal control feature that is specific to petty cash is

a. Separation of duties
b. Assignment of responsibility
c. Proper authorization
d. Imprest system
nt must be:

ut held for later delivery to creditors

ents for a certain period

paring a bank reconciliation which ends with adjusted cash balance?

d bank drafts
all normal operating expenses for a period of time
lassification of the related obligation for which cash was restricted
ash equivalents
B.

D.
Cash in Bank - current account 4,000,000
Cash in Bank - payroll account 1,500,000
Cash on Hand (500k -200k) 300,000
Treasury bill 2,000,000
Cash and cash equivalents 7,800,000

Petty cash fund (50k - 5k expense - 5k IOUs) 40,000

Cash in bank - current account 4,000,000
Cash in bank - payroll account 1,000,000
Cash on hand (500k - 100k check payable) 400,000
Cash in sinking fund 1,500,000
Commercial papers 2,000,000
Cash and cash equivalents, 12/31/21 8,940,000
(This amount should be deducted because it has already been recorded as a disbursement)

(This amount should not be included in the cash balance since it is restricted)

Undeposited collections 40,200

Current account - unrestricte 620,000
Disbursement checks 130,000
Compensating balance -
Reportable cash balance 790,200

1,200 + 1,800,000

These are not considered cash equivalents. They are advances to employees

This is restricted and not available for general use, hence it is not cash equivalent
10,000
This is a receivable, not cash or cash equivalent
This is a liability, and not included in cash or cash equivalents
ONLY Certificates of deposits with maturity less than 3 months are considered cash equivalents. NOt considered

This a post dated check and not included in cash for 12/31/2020
Restricted cash and not available for general use
15,000

Commercial savings 3,000,000

Petty cash fund 10,000
Currency coin on hand 15,000
Cash and cash equivalent 3,025,000
Total amount that should be in the fund:
Expenses 8,120
Cash remaining 1,500
Total 9,620

Initial fund 10,000

Calculated petty cash 9,620
Petty cash shortage -380

12/31/2022 Miscellaneous general expense 8,120

Cash short or over 380
Petty cash fund 8,500

Balance per bank statement, 12/31/22 27,910

Collections recorded but not yet deposited 1,950
Note collection by bank and not recorded on book 2,800
NSF checks - not recorded on books -2,000
Bank charges not recorded -40
Outstanding checks -3,000
Cash balance 27,620 wrong

Outstanding checks, 12/31 37,450

Actual checks cleared in December:
Checks and debit memos recorded by bank in D 24,320
Less: December service charge -1,000 23,320
Cash disbursements per books during December -34,658
Outstanding checks at November 30 26,112 wrong
bursement)

ash equivalents. NOt considered

 I. ASSERTIONS
Audit Assertions for Cash and Cash Equivalents
Existence Cash balance on the balance sheet really exist at the reporting date
Completeness Cash balances include all cash transactions that have occured during the accounting p
Rights and Obligations The company has title to the cash accounts as of the reporting date
Valuation or Allocation Cash
The recorded balances
is properly reflect
classified the balance
on the true underlying economic
sheet and value
adequate of the cash
disclosure has and
beencash
ma
Presentation and disclosureto the financial statements

II. AUDIT OBJECTIVES

To determine that:
1. Cash balances at the end of the reporting period represent cash and cash items on hand, in transit to, or in depo
2. Cash transactions have been properly recorded
3. Cash balances are properly described and classified, and adequate disclosure with respect to amounts restricted

III. INTERNAL CONTROL PROCEDURES

Internal control procedures over cash receipts:
a. No one person should be assigned the function of cash handling and record keeping
b. Official receipts must be pre-numbered and sequentially used.
c. Each day's cash receipts must be deposited intact
d. Deposits should be matched with official receipts. The person reconciling the official receipts with the deposits m
e. Cash sales should be recorded at the point of sale (point of sale system or POS)
f. Cash register totals and credit card machines should be balanced daily. Any resulting cash shortgage or overage

Internal control procedure over cash disbursements:

a. All disbursements must be properly authorized and adequately documented. The adoption of the voucher system
b. Payments must be made by checks, electronic fund transfer, or from petty cash fund
c. Issued checks must be sequentially numbered
d. Checks should be signed by at least two persons to prevent fictitious disbursements
e. Check signatories shall be persons in appropriate high levels in the organization
f. Checks issued must be payable to specific entities (company or person) and must not be made to "Cash"
g. Periodic bank reconciliations must be a person independent of the authorization, check signing function and cash

IV. AUDIT PROCEDURES

1. Conduct a cash count of undeposited collections, petty cash and other funds
a. Obtain custodian's signature to acknowledge return of items counted
b. Reconcile items counted with general ledger balance
c. Trace undeposited collections counted to bank reconciliation
d. Follow up dispositions of items in cash counted
- Undeposited collections should be traced to bank deposits
- Checks accomodated in petty cash should be deposited after the count to establish their validity
- IOUs in the petty cash should be confirmed and traced to collections in the next payroll period
- Expense vouchers should be traced to the succeeding replenishment voucher
e. Coordinate cash count with count of marketable securities and other negotiable assets of the client
f. Obtain confirmation of year-end fund balances of cash not counted in branches or other offices

2. Confirm bank balance bu direct correspondence with all banks in which the client has had deposits and

3. Obtain bank reconciliation

a. Check arithmetical accuracy of reconciliation
b. Trace balance per book to the general ledger balance of cash account
c. Trace balance per bank to bank statement and compare with amount confirmed by bank
d. Establish authenticity of reconciling items by reference to their respective sources, like:
- Bank debit or credit advices
- Duly approved journal vouchers
e. Investigate checks outstanding for a long period of time
- Consider adjustment, especially if the check is already stale
- Consider the possibility of an errnoeous preparation of the check
f. Investigate any unusual reconciling items
g. Where internal control over cash is weak, consider preparing a proof of cash reconciliation

4. Obtain cutoff bank statement showing the client's transactions with the bank at least one week after the
a. Trace year-end reconciling items, like:
- Deposit of the year-end undeposited collections
- Completeness of year-end outstanding checks
- Corrections of bank errors
b. Examine supporting documents of year-end outstanding checks that did not clear in the cutoff bank statement

5. Obtain a list of interbank transfers of funds a few days before and after the reporting date
a. Vouch supporting documents
b. Ascertain that the related receipts and disbursements were booked by the client within the same day or at least w

6. Test reasonabless of cutoff by:

a. Comparing dates of checks returned with cutoff bank statements to dates of recording in the cash disbursements
b. Tracing receipts recorded a few days before the reporting date to bank deposits

7. Inspect savings account passbook and certificates of deposits

a. Reconcile with book balances
b. Update interest earned posting on passbooks, if necessary
c. Compare balances with bank confirmation reply

8. Determine any restrictions on availability of cash

9. Determine propriety of financial statements presentation and adequacy of disclosures.
 s
g date
d during the accounting period
g date
ealue of the cash
disclosure has and
beencash
madeequivalents
in the notes

d, in transit to, or in depository banks

pect to amounts restricted as to withdrawal are made in the financial statements

eipts with the deposits made should be one other than the person making the deposit

sh shortgage or overage should be monitored

on of the voucher system, which requires review of supporting documents as support for disbursements is highly recommende

e made to "Cash"
signing function and cash receipts function. The recpnciliation must be made at least once a month to ensure that all deposits a
of the client

t has had deposits and loans during the year

east one week after the reporting date, and:

cutoff bank statement

he same day or at least within the same month

n the cash disbursements register

nts is highly recommended.

o ensure that all deposits and disbursements are properly made and recorded both by the entity and the bank
Multiple Choice:
1. Which of the following would the auditor consider to be an incompatible function if the cashier receives
A. The cashier prepares the remittance list.
B. The cashier makes the deposit to the bank.
C. The cashier records individual credits to A/R.
D. The cashier endorses the checks.

2. Which of the following is an effective audit procedure that an auditor might use to detect kiting between
A. Review authenticated deposit slips.
B. Review subsequent bank statements.
C. Prepare a year-end bank reconciliation.
D. Prepare a schedule of interbank transfers.

3. Immediately upon receipt of cash, a responsible employee should

A. Record the amount in the cash receipts journal.
B. Prepare a remittance listing.
C. Update the accounts receivable subsidiary ledger.
D. Defalcate the cash for personal use.

4. Cash receipts from sales on account have been misappropriated, as incompatible functions exist within
likely to be detected by an auditor?
A. Overstating the sales journal.
B. Overstating the accounts receivable control ledger.
C. Overstating the accounts receivable subsidiary ledger.
D. Recording write-offs of accounts receivable in the general journal.

5. Which of the following is not an appropriate procedure for controlling the petty cash fund?
A. The petty cash custodian obtains supporting documents such as invoices and receipts from
each individual to whom the petty cash fund is paid.
B. Surprise counts of the fund are performed by the company’s internal auditors to determine
if the fund is accounted for satisfactorily.
C. Upon receiving petty cash receipts and other supporting documents, the general cashier
issues to the petty cash custodian a company check, rather than cash, to replenish the fund.
D. Upon receiving the petty cash receipts and other supporting documents, the petty cash
custodian records the expenditures in the company’s computerized accounting system.

6. Which of the following is NOT an effective internal control over cash and cash equivalents?
A. Requiring that all checks must be paid to cash.
B. Requiring that all checks must be signed by at least two authorized personnel.
C. Setting limits as to how much can be approved by different key management personnel
within the entity.
D. Requiring that significant cash disbursements be made through issuance of checks.

7. During the audit of cash, the auditor is most concerned with the management assertion of
A. Existence.
B. Rights and obligations.
C. Completeness.
D. Presentation and disclosure.

8. Statement I: The primary purpose of sending a standard bank confirmation request to financial institution
information regarding the existence and accuracy of the client’s deposit and loan balances.
Statement II: The client should send a blank confirmation request to banks and other financial institutions.
A. Only Statement I is correct.
B. Only Statement II is correct.
C. Both statements are correct.
D. Both statements are incorrect.

9. In performing a count of cash on hand at the end of the reporting period, which of the following procedur
A. Ascertain that all undeposited checks are payable to the order of the client, either directly
or through endorsement.
B. Return the funds to the custodian without the need for a signed acknowledgment from the
custodian.
C. Insist that the custodian be present throughout the count.
D. Control all cash and negotiable instruments held by the client until all funds are properly
accounted for.

10. During your review of the working papers prepared by your audit staff, you noted the following:
F Footed the deposits in transit.
What does this tick mark mean?
A. The deposits in transit have been properly recorded as cash collections.
B. The deposits in transit have been traced to official receipts.
C. The auditor added all the deposits in transit at the end of the year.
D. The auditor confirmed the existence of deposits in the transit with the bank.
n if the cashier receives remittances from customers?

o detect kiting between banks?

e functions exist within the client. Which of the following acts would conceal this defalcation and be least

quivalents?
est to financial institutions with which the client has done business with during the year is to corroborate
osit and loan balances.
er financial institutions.

of the following procedures should NOT be done by the audit staff?

ed the following:
and be least
orroborate
Disbursing bank nagpalabas ng pera
Receiving bank nagtanggap ng pera
A. Imprest balance of the petty cash fund (accountability), 12/31/22
B. Valid items actually accounted for during the the count
Bills 9 pcs 1,000 9,000
13 pcs 500 6,500
44 pcs 100 4,400
90 pcs 50 4,500
10 pcs 20 200 24,600

Coins 6 loose 10 60
24 loose 5 120
18 loose 1 18
32 loose 0.25 8 206

Adjustment to bills and coins, Dec 31:

Petty cash vouchers issued in January 2023 (still cash) (1,500 + 975) 2,475
Check issued by Ms. Aires in January 2023 (still cash) 1,150
IOU from Mr. Santiago in January 2023 (still cash) 1,700
Contributions from employees (assumed mixed) -2,800 2,525

Valid items originated from the petty cash fund

Petty cash vouchers, issued in December (2,250 + 1,145) 3,395
Checks issued by Mr. Buenos in December 2,300
IOU from Mr. Cordoba 1,200
11.) Shortage in Petty cash fund

ADJUSTING ENTRY
Various expenses 3,395
Receivable from employee 1,200
Receivable from petty cash custodian 15,774
Petty cash fund 20,369

12.) B. Credit petty cash fund 20,369

13.) Petty cash fund at December 31, 2022

Bills and coins, adjusted at December 31 27,331
Accomodation check issued by Mr. Buenos 2,300
TOTAL 29,631
Deposit in transit, June 1 2,000
Book collections during the month (corrected) 10,500
Total collections available for deposit 12,500
Bank credits during the month -10,400
14.) Deposit in transit, June 30, 2022 2,100

Outstanding checks, June 1, 2022 1,100

Book disbursements during the month (corrected) 13,220
Total disbursement available for presentation 14,320
Bank debit during the month -12,120
15.) Outstanding checks, June 30, 2022 2,200

Unadjusted balance per book 20,380

Note collected by bank 4,500
Bank service charge -550
Error in recording June 17 collection (5,400 - 4,500) 900
Error in recording Check #60 -100
16.)Adjusted balance per book (bank) 25,130
 DISBURSEMENT
Book Bank
12/31/22 50,000 01/04/23 50,000
01/05/2023 50,000
OVERSTATEMENT01/04/2023 50,000
12/31/2022 50,000
UNDERSTATEMENT
01/05/2023 50,000
1/04/2023 50,000 12/31/2022 50,000

RECEIVING
Book Bank
12/31/22 50,000 01/04/23 50,000
12/31/22 50,000 OVERSTATEMENT 01/04/2023 50,000
1/05/2023 50,000 UNDERSTATEMENT 01/04/2023 50,000
01/05/2023 50,000 Erroneously recorded 12/31/22 50,000

17.) Overstatement CASE 2

Transfer 2:
Disbursing Bank: Receiving Bank:
Date Recorded: 01/05/2023 Date Recorded: 12/31/2022
Date Debited: 01/04/2023 Date Credited: 01/04/2023
creates an overstatement of the cash balance on the disbursing bank's books at 12/31/2022 because the disbursem
recorded until 01/05/2023.
Explanation: At 12/31/2022, the cash is already recorded as received by the receiving bank, but the disbursing bank
recorded the disbursement. Thus, the total cash across both banks is overstated at year-end.

18.) B. Kiting

19.) Understatement CASE 3

Transfer 3:
Disbursing Bank: Receiving Bank:
Date Recorded: 12/31/2022 Date Recorded: 01/05/2023
Date Debited: 01/05/2023 Date Credited: 01/04/2023
until 01/05/2023. This creates an understatement of the cash balance on the disbursing bank's books at
12/31/2022.
Explanation: At 12/31/2022, the disbursement is already recorded by the disbursing bank, but the receiving bank
has not yet recorded the receipt. Thus, the total cash across both banks is understated at year-end.

20. Errneously recorded but did not cause misstatement CASE 4

Transfer 4:
Disbursing Bank: Receiving Bank:
Date Recorded: 01/04/2023 Date Recorded: 01/05/2023
Date Debited: 12/31/2022 Date Credited: 12/31/2022
Both the disbursing and receiving banks' balances are affected on 12/31/2022, but since these amounts offset
each other, there is no misstatement of the overall cash balance at year-end.
12/31/2022. The disbursement and receipt have been recognized on both banks' books by year-end, ensuring no
misstatement.
50,000 Ito yung icocompare
Petty Cash vouchers:
Supplies 12/28/22 Expense Hindi pa sila
Representation 12/29/22 3,395 voucher nagagamit
Transportation 1/3/2023 Cash on
Supplies 1/4/2023 2,475 hand

Checks:
Maidana 9,750 customer should be part of receivable
Mr. Buenos 2,300 employee
Ms. Aires 1,150 employee Pera pa siya nung December, classified as billed and coin
Ginobili 1,800 customer

Bills 24,600
Coins 206

IOUs
Cordoba 1,200 employee
Santiago 1,700 employee

Collections for the following sales invoices:

#1100 5,600
34,226 #1101 4,450
15,774 #1102 3,920
#1103 4,700
#1104 1,000 0 Classified as sales

Various envelopes:
Unclaimed honorarium 4,500
Contributions from employee -2,800

Petty cash fund - box (used 34,226

Shortage 15,774

Petty cash fund, 12/31/22 29,631

 Books Bank
Unadjusted balance - May 31, 2022 23,000
Beginning balance 23,900
Collections:
June 1 - 2,000 Deposit in transit
June 8 3,000 3,000
June 17 4,500 5,400 Mas reliable and record ng bank
June 29 2,100 - Di pa natanggap ng bank

Less: Checks paid

#59 1,100 1,100 check is no longer outstanding
#60 1,000 1,100 understated by 100 ang books
#61 1,000 1,000
#62 900 -
#63 2,000 2,000
#64 1,420 1,420
#65 400 400
#66 3,000 3,000
#67 2,100 2,100
#68 1,300 -
Unadjusted ending balance 20,380
Notes collected (4,500 - 550) 3,950
Under/Over
Collections 900
#60 -100
Adjusted ending balance 25,130 25,130 16.)
Deposit in transit 2,100 14.)
Outstanding checks -2,200 15.)
Collections 10,400
Checks paid -12,120
Notes collected (4,500 - 550) 3,950
Unadjusted bank balance 23,000
022 because the disbursement is not

nk, but the disbursing bank has not yet

end.
ank's books at

, but the receiving bank

year-end.

these amounts offset

y year-end, ensuring no
lassified as billed and coin - "not - Post dated checks"
record ng bank

r outstanding
00 ang books