PRACTICE SET

Use the following information for the next two (2) questions:
John Cena Company provided the following data for the purposes of reconciling the cash balance per book:
Balancer per book 220,000
Outstanding checks 50,000
Deposit in transit 90,000
December NSF checks 30,000
Erroneous credit to John Cena’s account, representing proceeds of loan granted to John Bo Co. 60,000
Proceeds of note collected by bank for John Cena, net of service charge of P4,000 150,000
Erroneous bank charge 3,000
A check of P5,000 in payment of account was recorded by the company as 50,000

1) How much is the correct cash balance?

A. 295,000 B. 385,000 C. 389,000 D. 299,000

2) How much is the cash in bank balance as shown in the bank statement?
A. 402,000 B. 385,000 C. 312,000 D. 406,000

3) The cash account shows a balance of P38,000 before reconciliation. The bank statement does not include
a deposit of P2,300 made on the last day of the month. The bank statement shows a collection by the bank
of P940 and a customer’s check for P220 was returned because it was NSF. A customer’s check for P450
was recorded on the books as P540, and a check written for P79 was recorded as P97. The correct balance
in the cash account was
A. 38,612 B. 38,828 C. 38,648 D. 40,948

4) The books of AJ Service, Inc. disclosed a cash balance of P68,757 on June 30. The bank statement as of
June 30 showed a balance of P54,780. Additional information that might be useful in reconciling the two
balances follows:

(a) Check payable to creditors for P3,000 was erroneously recorded on the books as P4,500.

(b) A customer’s dated March 25 was discounted on April 12. The note was dishonored on June 29 (maturity
date). The bank charged AJ’s account for P14,265, including a protest fee of P42.

(c) The deposit of June 24 was recorded on the books as P2,895, but it was actually a deposit of P2,700.

(d) Outstanding checks totaled P9,885 as of June 30.

(e) There were bank charges for June of P210 not yet recorded on the books.

(f) AJ’s account had been charged on June 26 for a customer’s NSF check for P1,296.

(g) AJ’s account had been debited by the bank for P600. This amount should have been credited to JB’s
account.

(h) Receipts of June 30 for P13,425 were recorded by the bank on July 2.

(i) A bank memo stated that a customer’s note for P4,500 and interest of P165 had been collected on June
27, and the bank charged a P36 collection fee

What is the correct cash balance at the end of the month?

A. 45,495 B. 58,920 C. 58,956 D. 58,290

5) Czech Company provided the following information on December 31, 2023:

Cash balance per bank statement 4,000,000
Checks outstanding (including certified check of P100,000) 500,000
Customer note collected by the bank for Czech 150,000
NSF checks of customers returned by bank 200,000
Bank service charge shown in December bank statement 20,000
Error made by Czech in recording a check that cleared the bank in December (check was drawn
in December for P100,000 but recorded at P10,000) 90,000
Deposit in transit 1,300,000

Page 5 of 7
 What is the cash balance per ledger on December 31, 2023?
A. 4,900,000 B. 5,060,000 C. 4,880,000 D. 4,970,000

Use the following information for the next two (2) questions:
Following data pertaining to the cash transactions and bank account of Pepito Company for May 2021 are
available to you:

Cash balance, per accounting records, May 31, 2021 P 25,791

Cash balance, per bank statement, May 31, 2021 49,077
Bank service charge for May 164
Check No. 1086 issued to a supplier entered in the accounting records as P3,150 but
1,800
deducted in the bank statement at an erroneous amount of
Debit memo for the cost of printed checks delivered by the bank; the charge has not
188
been recorded in the accounting records
Outstanding checks, May 31, 2021 10,092
Deposit of May 30 not recorded by bank until June 1 7,305
Proceeds of bank loan on May 30, not recorded in the accounting records, net of
8,550
interest of P900
Proceeds from a customer’s promissory note; principal amount P12,000, collected by
12,150
the bank, taken up in the books with interest
Stolen check lacking an authorized signature, deducted from Abiso’s account by the
1,200
bank in error

6) The adjusted cash in bank balance of Abiso Company at May 31, 2021 is:
A. 42,785 C. 45,285
B. 46,140 D. 45,450

7) The cash in bank balance of Abiso Company at May 31, 2021 is:
A. 19,659 understated C. 20,349 understated
B. 39,988 understated D. 35,988 understated

8) Kei Company’s checkbook balance at December 31, 2021 was P167,085. In addition, Marc held the following
items in its safe on that date:

Check payable to Marc dated January 2, 2022 in payment of a sale made in December
P 15,000
2021, not included in December 31 checkbook balance
Check draw on Marc’s account, payable to a vendor, dated and recorded in Marc’s
8,275
books on December 31, but not mailed until January 10, 2022
Included in the book receipts which was recorded as P54,000. No correction was 45,000
made yet by Bucks Company.

What is the amount of cash in Marc’s December 31, 2021 statement of financial position?
A. 166,275 C. 166,360
B. 167,360 D. 166,255

Page 6 of 7
Deib Lhor Company banks with Maxpein Bank and prepares reconciliation of the bank and book balances on a
regular monthly basis. The December 31, 2021 reconciliation shows a balance per bank of P600,050, balance per
books of P607,000, outstanding checks (including certified checks of P20,000) of P96,300, deposit in transit of
P180,000, interest earned on the bank balance of P250, and service charges of P400. Included in the bank
statement was a canceled check which the company failed to record. The check was in payment of accounts
payable.

9) What is the amount of the unrecorded check issued by the company in payment of accounts payable?
A. 96,900 C. 96,500
B. 59,600 D. 59,900

10) What is the adjusted balance of cash?

A. 683,919 C. 703,750
B. 683,750 D. 703,919

Page 7 of 7