INTACC 1 – Cash and Cash Equivalents (Quiz)
True or False
1. A bank overdraft occurs when the cash in bank account has a credit balance, which is generally classified as a
current liability.
2. A bank overdraft may be offset against another account provided it is with the same bank
3. A bank overdraft may be offset against another account maintained in a different bank only when the said
overdraft is immaterial in amount.
4. A compensating balance shall not be reported as cash when it is restricted from withdrawal
5. Cash equivalents are short term highly liquid investments that are readily convertible into cash and were acquired
so near to maturity that they present insignificant risk of change in value.
6. A six-month treasury bill acquired on October 1, 2025 which has a maturity date of March 31, 2026 shall be
reported as cash equivalents
7. An eight-month treasury bill acquired on November 15, 2025 and shall mature on February 1, 2026 shall be
reported as cash equivalents
8. Under the imprest system, the entry to record a replenishment would include a debit to petty cash fund and a
credit to cash in bank
9. Under the imprest system, the replenishment check shall be computed by adding all receipts provided by the
petty cash custodian and subsequently validated as correct.
10. Under the fluctuating system, the ledger balance prior to a physical count is representing the beginning balance
11. Under the imprest system, if the appropriate adjusting entry was not prepared, the petty cash balance and the
expenses would be both overstated.
12. Deposits denominated in foreign currency that are not restricted as to withdrawal, shall be reported as cash
translated to the entity’s reporting currency using the exchange rate at the time the financial statements are
prepared.
13. Cash deposits in an institution that is under receivership shall present it at face amount or its realizable value
whichever is higher, wherein changes are reported immediately in the income statement
14. Undelivered checks should be added back to the cash balance regardless of the date written on the check
15. A customer’s check dated after balance sheet date shall be removed from cash and reverted back to accounts
receivable.
Computation
16. The following items represents the cash and cash equivalent totals of Jamaeca Company as of December 31,
2025: Cash on hand 900,000, Cash in bank 1,600,000, Total 2,500,000.
The cash on hand included the following items:
• Customer check, dated January 6, 2026, P60,000;
• Customer check, dated December 29, 2025, P35,000;
• Traveler’s checks, P20,000
Cash in bank was composed of the following accounts:
PNB checking account 900,000
BPI checking account 700,000
• The PNB checking account was taken from the ledger balance. The following information were gathered: Deposits
in transit, P120,000; Outstanding checks, P95,000; December credit memos, P25,000; December debit memos,
P30,000; bank error, account was debited for a check of another company, P6,000
• The BPI checking account was taken from the bank statement balance. The following information were gathered:
Deposits in transit, P80,000; Outstanding checks, P55,000; December credit memos, P18,000; December debit
memos, P12,000; bank error, account was debited for a check of another company, P8,000
The correct cash on hand amount is
17. The following items represents the cash and cash equivalent totals of Marienel Company as of December 31,
2025: Cash on hand 900,000, Cash in Bank 1,600,000, Total 2,500,000.
The cash on hand included the following items:
• Customer check, dated January 6, 2026, P60,000;
• Customer check, dated December 29, 2025, P35,000;
• Traveler’s checks, P20,000
Cash in bank was composed of the following accounts:
PNB checking account 900,000
BPI checking account 700,000
• The PNB checking account was taken from the ledger balance. The following information were gathered: Deposits
in transit, P120,000; Outstanding checks, P95,000; December credit memos, P25,000; December debit memos,
P30,000; bank error, account was debited for a check of another company, P6,000
• The BPI checking account was taken from the bank statement balance. The following information were gathered:
Deposits in transit, P80,000; Outstanding checks, P55,000; December credit memos, P18,000; December debit
memos, P12,000; bank error, account was debited for a check of another company, P8,
The adjusted cash in bank - PNB is
18. The following items represents the cash and cash equivalent totals of Zaika Company as of December 31, 2025:
Cash on hand 900,000
Cash in bank 1,600,000
Total 2,500,000
The cash on hand included the following items:
• Customer check, dated January 6, 2026, P60,000;
• Customer check, dated December 29, 2025, P35,000;
• Traveler’s checks, P20,000
Cash in bank was composed of the following accounts:
PNB checking account 900,000
BPI checking account 700,000
• The PNB checking account was taken from the ledger balance. The following information were gathered: Deposits
in transit, P120,000; Outstanding checks, P95,000; December credit memos, P25,000; December debit memos,
P30,000; bank error, account was debited for a check of another company, P6,000
• The BPI checking account was taken from the bank statement balance. The following information were gathered:
Deposits in transit, P80,000; Outstanding checks, P55,000; December credit memos, P18,000; December debit
memos, P12,000; bank error, account was debited for a check of another company, P8,000
The adjusted cash in bank - BPI is
19. The following information about Brylle Company’s Cash and Cash equivalents as of December 31, 2025:
MBTC checking account 450,000
RCBC checking account 300,000
UB time deposit account 200,000
• The MBTC account includes a compensating balance of P200,000. There are no restriction as to the withdrawal
of the said amount
• The RCBC account includes a compensating balance of P150,000 which is legally restricted as to withdrawal
• The UB time deposit was for a term of three months having a maturity date of January 31, 2026 which the
company has earmarked for the acquisition of an equipment to be made immediately upon maturity date
The amount to be reported as cash and cash equivalent is
20. The following information about Denise Company’s Cash and Cash equivalents as of December 31, 2025:
China Bank checking account 450,000
Maybank checking account 300,000
Additional information were provided as follows:
• China Bank account
o A check for P50,000 was written and recorded on December 29, 2025, dated December 30, 2025
remains on hand
o A check for P30.000 was written and recorded on December 27, 2025, dated January 2, 2025 remains on
hand
• Maybank account
o A check for P25,000 written and recorded on December 27, 2025, dated December 30, 2025 claimed by
the payee on December 29, 202500
o A check for P12,000 written and recorded on December 26, 2025, dated January 2, 2026 claimed by the
payee on December 30, 2025
The amount to be reported under cash and cash equivalent in the December 31, 2025 balance sheet is
21. The following information in relation to Francine Company’s petty cash fund:
• On December 11, fund was set up for P50,000
• Expenditures up to December 19, totaled P33,000
• Replenishment was made on December 20. A physical count was made which amounted to P15,000
• Expenditures up to December 30, totaled P44,000
If Francine Company was using the imprest system, the journal entry on December 20 would be
22. The following information in relation to Angelyn Company’s petty cash fund:
• On December 11, fund was set up for P50,000
• Expenditures up to December 19, totaled P33,000
• Replenishment was made on December 20. A physical count was made which amounted to P15,000
• Expenditures up to December 30, totaled P44,000
If Angelyn Company is using the imprest system, the necessary adjusting entry to be made is
23. The following information in relation to Ayanna Company’s petty cash fund:
• On December 11, fund was set up for P75,000
• Expenditures up to December 19, totaled P55,000
• Replenishment was made on December 20. A physical count was made which amounted to P20,000
• Expenditures up to December 30, totaled P60,000
• A physical count at yearend amounted to P12,500
The adjusting entry at yearend is
24. Krisha Company’s cash and cash equivalents total as of December 31, 2025 amounted to P5,000,000.
Included in the amount were the following items:
• P800,000 in treasury bonds, the one-year term bonds were acquired by Krisha Company on November 15, 2025
ands has a scheduled maturity date of February 1, 2026
• Peso equivalent of its US dollar denominated deposits of $60,000. The rate used P56:$1 was the exchange rate
current as of January 9, 2026 when the schedule was prepared. The average exchange rate in 2025 was P54.75
while the exchange rate as of December 31, 2025 was P57.80.
• P170,000 deposit in CLS Bank. The bank is under receivership and it has been determined that only 70% of the
deposit is recoverable.
The correct cash and cash equivalent balance to be reported as of December 31, 2025 is
25. As’ad Company’s cash and cash equivalents total as of December 31, 2025 amounted to P3,400,000.
Included in the amount were the following items
• Collections made from January 2 – 6 of 2026 amounting to P250,000
• Manager’s check of P80,000
• Customer check on hand dated May 15, 2025, P20,000
• Overdrafts of P40,000 and P25,000 in its BDO and BPI checking accounts. As’ad Company has another deposit
in BDO having a debit balance.
• Customer check on hand of P40,000 dated December 31, 2025
• Petty cash fund in the amount of P35,000. As’ad Company is using the fluctuating system. Unreplenished
vouchers amounted to P15,000
The correct cash and cash equivalent amount to be included in the December 31, 2025 balance sheet is
Answer Key:
1. T
2. T
3. F
4. T
5. T
6. F
7. T
8. F
9. F
10. F
11. F
12. F
13. F
14. T
15. T
16. 840,000
17. 895,000
18. 733,000
19. 600,000
20. 842,000
21. Dr. Exp 33k Cash Short 2k Cr. CIB 35K
22. Dr. Exp 44k Cr. PCF 44k
23. –
24. –
25. –