Lesson 1 CCE

Question 1

Money and any negotiable instrument that is payable in money and acceptable by bank for deposits and immediate credit

Answer 1

Cash

Question 2

Short term and highly liquid investments that are readily convertible into cash and so near their maturity that they represents insignificant risk of changes in value because of changes in interest rate

Answer 2

Cash equivalent

Question 3

True or false; 3 months BSP T-BILL

Answer 3

True

Question 4

True or false; 3 years BSP T-Bill purchased 3 months before date of maturity

Answer 4

True

Question 5

true or false; 3 months time deposit

Answer 5

True

Question 6

Cash is measured at

Answer 6

Fair amount

Question 7

True or false; Cce should be shawn as the first line item under current Assets, but the details comprising the cca should be disclosed in the notes to income statement

Answer 7

False

Question 8

What are the important areas:

Answer 8

Cash fund, petty cash fund, bank overdraft, compensating balance, post dated check delivered, stale check, cash shortage or overage

Question 10

True or false; classification for cash fund as current or noncurrent asset should parallel the classification of related liability

Answer 10

True

Question 11

It is a set aside for the payment of a bond payable shall be classified as current asset when the bond payable is already due within 1 year after the end of the reporting period

Answer 11

Sinking fund

Question 12

True or false; cash funds set aside for the acquisition of a non-current asset should be classified as non-current regardless of the year of disbursement

Answer 12

True

Question 13

Money set aside to pay small expenses which cannot be paid conveniently by means of check

Answer 13

Petty cash fund

Question 14

What are the two methods of handling petty cash

Answer 14

Imprest fund system and fluctuating fund system

Question 15

Usually followed in handling petty cash transaction

Answer 15

Imprest Fund system

Question 16

Checks drawn to replenish the fund do not necessarily equal the petty cash disbursement

Answer 16

Fluctuating fund system

Question 17

The journal entry for imprest fund system: check is drawn to establish the fund

Answer 17

Dr. petty cash, Cr. Cash in bank

Question 18

Give the journal entry using fluctuating fund system; check is drawn to establish the fund

Answer 18

Dr. Petty cash , Cr. Cash in bank

Question 19

Give the journal entry using the imprest fund system; payment of expenses out of the fund

Answer 19

Memo entry only

Question 20

Give the journal entry using impressed fund system; replenishment of petty cash payment

Answer 20

Dr. Expenses, Cr. cash in bank

Question 21

Give the journal entry using fluctuating font system payment of expenses out of the fund

Answer 21

Dr. Expenses, Cr. petty cash fund

Question 22

Give the journal entry using the fluctuating fund system; replenishment of petty cash payment

Answer 22

Dr. Petty cash fund, Cr. cash in bank

Question 23

Give the journal entry using the imprest font system; adjustment of the unreplenished expense to state the correct petty cash balance

Answer 23

Dr. Expenses, Cr. petty cash fund

Question 24

Give the journal entry using fluctuating fund system: adjustment of the replenished expenses to state the correct petty cash balance

Answer 24

No adjustment

Question 25

Give the journal entry using the imprest fund system; increase in the fund

Answer 25

Dr. Petty cash fund, Cr. cash in bank

Question 26

Give journal entry using imprest fund system; decrease in the fund

Answer 26

Dr.Cash in bank, Cr. petty cash fund

Question 27

Give the journal entry using fluctuating fund system increase in the fund

Answer 27

Petty cash fund cash in bank

Question 28

Give the journal entry using punctuating fund system; decrease in the fund

Answer 28

Dr. Cash in bank, Cr. petty cash fund

Question 31

When the cash in bank account has a credit balance it is what

Answer 31

Overdraft

Question 32

is classified as a current liability and should not be offset against another bank account with debt balance. Generally, overdraft are not permitted in the philippines

Answer 32

Bank overdraft

Question 33

True or false; bank overdraft is classified as a current liability and should be offset against another bank account with debt balance. Generally, overdraft are not permitted in the philippines

Answer 33

False

Question 34

True or false; bank overdraft is classified as a current liability and should not be offset against another bank with debt balance. Generally, overdrafts are permitted in the philippines.

Answer 34

False

Question 35

The bank overdraft is classified as a current liability and should not be offset against another bank account with that balance generally overdrafts are not permitted in the philippines.

Answer 35

True

Question 36

An overdraft can also be offset against the other bank account if the amount is

Answer 36

Non-material

Question 37

it Generally takes the form of minimum checking or demand deposit account balance that must be maintained and connection with a borrowing agreement with a bank

Answer 37

Compensating balance

Question 38

Compensating balance is not legally restricted because of informal compensating balance agreement

Answer 38

Cash (current asset)

Question 39

Compensating balance is legally restricted for a short term loan because of formal compensating balance agreement

Answer 39

Cash held as a compensating balance (current asset)

Question 40

Compensating balance legally restricted for long term loan

Answer 40

Non-current investment (non-current asset)

Question 41

One that is merely drawn and recorded but not given to the payee before the end of reporting period

Answer 41

Undelivered or unreleased check

Question 42

Is a check not in cash by the payee within a relatively long period

Answer 42

Stale check

Question 43

Delivered is a check drawn, recorded and already given to the pay but it bears a date subsequently to the end of reporting period

Answer 43

Post dated check

Question 44

True or false; adjustment entries is required to restore the cash balance and set up the liability

Answer 44

True

Question 46

True or false; if the amount of Stale check is material it is accounted for as miscellaneous

Answer 46

False

Question 47

If the Amount of a stale check is _______ , it is accounted for as miscellaneous Income

Answer 47

Immaterial

Question 48

Give journal entry using cash shortage amount per cash count differs from balance per book

Answer 48

Dr. cash short or over, Cr. cash

Question 49

Give journal entry using cash overage; amount per cash count differs from balance per book

Answer 49

Dr. Cash, Cr, cash short or over

Question 50

Give journal entry using cash shortage; responsibility of the cashier or cash custodian

Answer 50

Dr. receivable from cashier, Cr. Cash Short/Loss

Question 51

Give journal entry using cash shortage; failure to disclose the cause of the difference

Answer 51

Dr. lost from cash shortage, Cr. cash short or over

Question 52

Give journal entry using cash overage: responsibility of the cashier or cash custodian

Answer 52

Dr. cash short or over, Cr. payables to cashier

Question 53

Give journal entry using cash overage; failure to the cost of the difference

Answer 53

Dr. cash short or over, Cr. miscellaneous income