7458 Cash and Cash Equivalents Flashcards
(5 cards)
An entity reported the following information at year-end:
* Share investments of P1,000,000 that are very actively traded in the stock market.
* Government treasury bills of P2,000,000 with a 10-year term but purchased on December 31 at which time the bills had two months to go until maturity.
* Cash of P4,000,000 in the form of coin, currency, saving account and checking account.
* Commercial papers of P1,500,000 with term of nine months but purchased on December 31 at which time the papers had three months to go until maturity.
I. Only highly liquid investments acquired three months or less before maturity can qualify as cash equivalents.
II. The cash equivalents should be reported at P3,500,000
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
A. Statements I and II are true
An entity had the following cash balances on December 31, 2025:
Cash in bank 5,000,000
Petty cash fund, all funds were reimbursed on December 31, 2025 50,000
Money market placement or commercial papers 1,500,000
Saving deposit 800,000
Cash in bank included P500,000 of compensating balance against short-term borrowing arrangement on December 31, 2025. The compensating balance is legally restricted as to withdrawal.
I. A compensating balance is classified separately as cash held as compensating balance under current assets if the related loan is short-term.
II. The cash and cash equivalents should be reported at P6,850,000
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
A. Statements I and II are true
tanan but minus 500k anf Cash in bank
An entity had the following account balances on December 31, 2025:
Cash on hand, including a customer check P100,000 dated January 31, 2026 500,000
Cash in bank – current account 4,000,000
Cash in bank – payroll account 1,000,000
Cash in bank – value added tax account 600,000
Foreign bank account unrestricted and in equivalent pesos 1,400,000
Cash in bank – restricted for plant addition expected to be disbursed in 2026 500,000
I. A cash fund set aside for acquisition of a noncurrent asset should be excluded from cash but reported as noncurrent investment regardless of the year of disbursement.
II. The cash and cash equivalents should be reported at P7,400,000 on December 31, 2025.
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
A. Statements I and II are true
minus 100k ang first line item
Wai labot ang last line item. NCA yarn
An entity reported the checkbook balance on December 31, 2025 at P5,000,000. In addition, the entity held following items in the safe on that date:
Check payable to the entity, dated January 2, 2026 in payment of a sale, not included in December 31 check book balance
—> 2,000,000
Check payable to the entity, deposited December 15 and included in December 31 checkbook balance, but returned by bank on December 30 stamped “NSF’. The check was redeposited on January 2, 2026 and cleared on January 5, 2026
—> 500,000
Check drawn on the entity’s account dated and recorded on
December 31, 2025 but not mailed until January 15, 2026
—> 300,000
Certificate of time deposit
—> 1,000,000
I. Any undelivered check is adjusted by restoring the cash account and recognizing the corresponding liability.
II. The cash account should be reported at P4,800,000 on December 31, 2025.
A. Statements I and II are true
B. Statements I and II are not true
C. Only statement I is true
D. Only statement II is true
A. Statements I and II are true
5M
(500k)
+300k <– nibayad na and recorded. But atoa pa since gi mail 2026
An entity provided the following information on December 31, 2025:
Petty cash fund 50,000 Cash on hand 200,000 Philippine Bank current account 5,000,000 Manila Bank current account 4,000,000 Manila Bank current account (overdraft) (500,000) BDO account set aside for bond payable due December 31, 2027 3,000,000 Treasury bonds 2,000,000 Treasury bills 2,500,000
Included among the checks drawn by the entity against the Philippine Bank current account and recorded on December 31, 2025 are:
* Check recorded and dated December 23, 2025 and delivered to payee on January 31, 2026, P100,000.
* Check recorded December 26, 2025, dated January 30, 2026 and delivered to payee on December 31, 2025, P150,000.
I. A bank overdraft is generally reported as a current liability and should not be offset against other bank accounts with debit balances.
II. A cash fund set aside for the payment of a liability is included in cash if the liability is already due in one year after the end of reporting period.
III. The cash and cash equivalents should be reported at P11,500,000 on December 31, 2025.
A. Statements I, II and III are true
B. Statements I, II and III are not true
C. Only statements I and II are true
D. Only statements I and III are true
A. Statements I, II and III are true
Philippine Bank current account 5,000,000 + 100k + 150k
NCA ang BDO and Treasury Bonds
