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ACC5112: Auditing and Assurance: Concepts and Applications 1
Compilation of Quizzes
QUIZ 1 - Cash and Cash Equivalents 2
THEORIES 2
MULTIPLE CHOICE PROBLEMS 6
SUPPLY THE ANSWER 16
QUIZ 2: Receivables without Impairment 20
THEORIES 20
MULTIPLE CHOICE PROBLEMS 24
SUPPLY THE ANSWER 34
PRELIMS: Cash and Cash Equivalents; and Receivables (without
Impairment) 37
THEORIES 37
MULTIPLE CHOICE PROBLEMS 41
SUPPLY THE ANSWER 50
QUIZ 3: Inventories (INTACC Focused) 54
THEORIES 54
MULTIPLE CHOICE PROBLEMS 57
QUIZ 4: Investment in Equity Securities, Associate and Debt Securities;
Cessation (Investment in Associate) 66
THEORIES 66
PROBLEM SOLVING 70
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ACC5112: Auditing and Assurance: Concepts and Applications 1
QUIZ 1 - Cash and Cash Equivalents
THEORIES
1. A Cash Over and Short account
a. is credited when the petty cash fund proves out over.
b. is credited when the petty cash fund proves out short.
c. is not generally accepted.
d. is a contra account to Cash.
2. Bank reconciliation are normally prepared on a monthly basis to identify adjustments needed in
the depositor’s records and to identify bank errors. Adjustments on the part of the depositor
should be recorded for
a. Book errors, bank errors, deposits in transit and outstanding checks.
b. Outstanding checks and deposits in transit.
c. All items except bank errors, outstanding checks and deposits in transit.
d. Bank errors, outstanding checks and deposits in transit.
3. The reconciling item that the auditor would verify to be deposited in the cut-off bank statement
is the?
a. Erroneous bank credit
b. Bank service charge
c. Note collected by bank
d. Deposit in transit
4. A cash equivalent is a short-term, highly liquid investment that is readily convertible into known
amounts of cash and
a. bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation.
b. is acceptable as a means to pay current liabilities.
c. has a current market value that is greater than its original cost.
d. is so near its maturity that it presents insignificant risk of changes in interest rates.
5. If the cash balance shown in the company’s cash records is less than the correct cash balance
and neither the company nor the bank has made any errors, there must be
a. bank charges not yet recorded by the depositor.
b. an interest credited by the bank in the depositor’s account.
c. a no-sufficient fund check returned by the bank.
d. outstanding checks.
6. What happens when a petty cash is in use?
a. Petty cash is debited when the fund is replenished.
b. Most small amounts are paid from cash receipts before they are deposited.
c. Expenses paid with petty cash are recorded when the fund is replenished.
d. Petty cash is credited when the fund is replenished.
7. What is a compensating balance?
a. Temporary investments serving as collateral for outstanding loans
Q1 - Q4 - Prelim Exam
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b. b. Margin accounts held with brokers
c. Minimum deposits required to be maintained in connection with a borrowing
arrangement
d. Savings account balances
8. What is the major purpose of an imprest petty cash fund?
a. To determine the honesty of the petty cashier.
b. To effectively control cash disbursements.
c. To ease the payment of cash to vendors.
d. To effectively plan cash inflows and outflows.
9. Which of the following scenarios imply good internal control for cash?
a. The cashier has access to cash receipts journal.
b. All disbursements are supported by approved vouchers and recorded in the check
register or cash disbursement journal.
c. Daily receipts await 3 days in the company’s possession before being deposited in the bank.
d. Audit procedures, dates of conducting audit, department involved and scope of audit are
announced to the cashier.
10. A bank reconciliation is
a. A schedule that accounts for the difference between an entity’s cash balance as shown
in the bank statement and the cash balance shown in the general ledger.
b. A merger of two banks that previously were competitors.
c. A formal financial statement that lists all of the bank account balances of an entity.
d. A statement sent by the bank to depositor on a monthly basis.
11. Debit memos refer to items not representing checks paid by the bank which are charged or
debited by the bank to the account of the depositor but not yet recorded by the depositor as
cash disbursements. The following are examples of debit memos, except
a. bank service charges.
b. note collected by bank in favor of the depositor.
c. automatic charge for interest on loan of the depositor.
d. NSF or DAUD checks.
12. Bank statements provide information about all of the following, except
a. checks cleared during the period.
b. no sufficient funds checks.
c. errors made by the company.
d. bank changes for the period.
13. An erroneous bank charge is an?
a. Overstatement in bank disbursement
b. Understatement in bank receipts
c. Understatement in bank disbursement
d. Overstatement in bank receipts
14. Following are reconciling items in an enterprise’s bank reconciliation statement.
I. Deposits in transit
II. Company check for P32,500 recorded in the books for P23,500
Q1 - Q4 - Prelim Exam
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Ill. Note collected by bank in behalf of the company
IV. Deposit of another company erroneously credited by bank to the company’s account
V. No sufficient fund check charged back by bank
VI. Company deposit for P32,500 recorded in the books for P23,500
Which of these adjustments would be shown as addition to the cash balance per books in order
to arrive at the correct cash balance?
a. II and III
b. III and VI
c. II, III, and VI
d. II, V and VI
15. The journal entries for a bank reconciliation
a. are taken from the "balance per bank" section only.
b. may include a debit to Office Expense for bank service charges.
c. may include a debit to Accounts Payable for an NSF check.
d. may include a credit to Accounts Receivable for an NSF check.
16. In preparing a bank reconciliation, interest paid by the bank on the depositor’s account is
a. subtracted from the book balance.
b. subtracted from the bank balance.
c. added to the book balance.
d. added to the bank balance.
17. The following reconciling items are added to the book balance of cash in order to arrive at the
unadjusted bank balance of cash:
a. Erroneous bank credit
b. Deposit in transit
c. Debit memo
d. Erroneous book debit
18. When preparing a bank reconciliation, erroneous book credits are
a. added to the bank statement balance.
b. deducted from the bank statement balance.
c. added to the balance per books.
d. deducted from the balance per books.
19. Which of the following items must be added to the cash balance per ledger in preparing a bank
reconciliation which ends with adjusted cash balance?
a. Erroneous bank debit.
b. Note receivable collected by bank in favor of the depositor and credited to the account of
the depositor.
c. NSF customer check.
d. Service charge.
20. A proof of cash is used by an auditor to?
a. Comply with Philippines Auditing Practice Statements
b. Determine if there were any unauthorized disbursements or unrecorded deposits during
the reconciliation period
c. Prove the correctness of the cash balance in the client’s year-end statement of financial position
Q1 - Q4 - Prelim Exam
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ACC5112: Auditing and Assurance: Concepts and Applications 1
Compilation of Quizzes
QUIZ 1 - Cash and Cash Equivalents 2
THEORIES 2
MULTIPLE CHOICE PROBLEMS 6
SUPPLY THE ANSWER 16
QUIZ 2: Receivables without Impairment 20
THEORIES 20
MULTIPLE CHOICE PROBLEMS 24
SUPPLY THE ANSWER 34
PRELIMS: Cash and Cash Equivalents; and Receivables (without
Impairment) 37
THEORIES 37
MULTIPLE CHOICE PROBLEMS 41
SUPPLY THE ANSWER 50
QUIZ 3: Inventories (INTACC Focused) 54
THEORIES 54
MULTIPLE CHOICE PROBLEMS 57
QUIZ 4: Investment in Equity Securities, Associate and Debt Securities;
Cessation (Investment in Associate) 66
THEORIES 66
PROBLEM SOLVING 70
Q1 - Q4 - Prelim Exam
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-ACC5112
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- Prelim
- Auditing
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Exam ACC5112
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ACC5112: Auditing and Assurance: Concepts and Applications 1
QUIZ 1 - Cash and Cash Equivalents
THEORIES
1. A Cash Over and Short account
a. is credited when the petty cash fund proves out over.
b. is credited when the petty cash fund proves out short.
c. is not generally accepted.
d. is a contra account to Cash.
2. Bank reconciliation are normally prepared on a monthly basis to identify adjustments needed in
the depositor’s records and to identify bank errors. Adjustments on the part of the depositor
should be recorded for
a. Book errors, bank errors, deposits in transit and outstanding checks.
b. Outstanding checks and deposits in transit.
c. All items except bank errors, outstanding checks and deposits in transit.
d. Bank errors, outstanding checks and deposits in transit.
3. The reconciling item that the auditor would verify to be deposited in the cut-off bank statement
is the?
a. Erroneous bank credit
b. Bank service charge
c. Note collected by bank
d. Deposit in transit
4. A cash equivalent is a short-term, highly liquid investment that is readily convertible into known
amounts of cash and
a. bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation.
b. is acceptable as a means to pay current liabilities.
c. has a current market value that is greater than its original cost.
d. is so near its maturity that it presents insignificant risk of changes in interest rates.
5. If the cash balance shown in the company’s cash records is less than the correct cash balance
and neither the company nor the bank has made any errors, there must be
a. bank charges not yet recorded by the depositor.
b. an interest credited by the bank in the depositor’s account.
c. a no-sufficient fund check returned by the bank.
d. outstanding checks.
6. What happens when a petty cash is in use?
a. Petty cash is debited when the fund is replenished.
b. Most small amounts are paid from cash receipts before they are deposited.
c. Expenses paid with petty cash are recorded when the fund is replenished.
d. Petty cash is credited when the fund is replenished.
7. What is a compensating balance?
a. Temporary investments serving as collateral for outstanding loans
Q1 - Q4 - Prelim Exam
Q1Q1
-ACC5112
Q4
- Q4
- Prelim
- Prelim
- Auditing
Exam
Exam ACC5112
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ACC5112
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Q1ACC5112
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b. b. Margin accounts held with brokers
c. Minimum deposits required to be maintained in connection with a borrowing
arrangement
d. Savings account balances
8. What is the major purpose of an imprest petty cash fund?
a. To determine the honesty of the petty cashier.
b. To effectively control cash disbursements.
c. To ease the payment of cash to vendors.
d. To effectively plan cash inflows and outflows.
9. Which of the following scenarios imply good internal control for cash?
a. The cashier has access to cash receipts journal.
b. All disbursements are supported by approved vouchers and recorded in the check
register or cash disbursement journal.
c. Daily receipts await 3 days in the company’s possession before being deposited in the bank.
d. Audit procedures, dates of conducting audit, department involved and scope of audit are
announced to the cashier.
10. A bank reconciliation is
a. A schedule that accounts for the difference between an entity’s cash balance as shown
in the bank statement and the cash balance shown in the general ledger.
b. A merger of two banks that previously were competitors.
c. A formal financial statement that lists all of the bank account balances of an entity.
d. A statement sent by the bank to depositor on a monthly basis.
11. Debit memos refer to items not representing checks paid by the bank which are charged or
debited by the bank to the account of the depositor but not yet recorded by the depositor as
cash disbursements. The following are examples of debit memos, except
a. bank service charges.
b. note collected by bank in favor of the depositor.
c. automatic charge for interest on loan of the depositor.
d. NSF or DAUD checks.
12. Bank statements provide information about all of the following, except
a. checks cleared during the period.
b. no sufficient funds checks.
c. errors made by the company.
d. bank changes for the period.
13. An erroneous bank charge is an?
a. Overstatement in bank disbursement
b. Understatement in bank receipts
c. Understatement in bank disbursement
d. Overstatement in bank receipts
14. Following are reconciling items in an enterprise’s bank reconciliation statement.
I. Deposits in transit
II. Company check for P32,500 recorded in the books for P23,500
Q1 - Q4 - Prelim Exam
Q1Q1
-ACC5112
Q4
- Q4
- Prelim
- Prelim
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Exam ACC5112
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, Q1 - Q4 - Prelim Exam
Q1ACC5112
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- Auditing
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Q1 - and
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ACC5112
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Ill. Note collected by bank in behalf of the company
IV. Deposit of another company erroneously credited by bank to the company’s account
V. No sufficient fund check charged back by bank
VI. Company deposit for P32,500 recorded in the books for P23,500
Which of these adjustments would be shown as addition to the cash balance per books in order
to arrive at the correct cash balance?
a. II and III
b. III and VI
c. II, III, and VI
d. II, V and VI
15. The journal entries for a bank reconciliation
a. are taken from the "balance per bank" section only.
b. may include a debit to Office Expense for bank service charges.
c. may include a debit to Accounts Payable for an NSF check.
d. may include a credit to Accounts Receivable for an NSF check.
16. In preparing a bank reconciliation, interest paid by the bank on the depositor’s account is
a. subtracted from the book balance.
b. subtracted from the bank balance.
c. added to the book balance.
d. added to the bank balance.
17. The following reconciling items are added to the book balance of cash in order to arrive at the
unadjusted bank balance of cash:
a. Erroneous bank credit
b. Deposit in transit
c. Debit memo
d. Erroneous book debit
18. When preparing a bank reconciliation, erroneous book credits are
a. added to the bank statement balance.
b. deducted from the bank statement balance.
c. added to the balance per books.
d. deducted from the balance per books.
19. Which of the following items must be added to the cash balance per ledger in preparing a bank
reconciliation which ends with adjusted cash balance?
a. Erroneous bank debit.
b. Note receivable collected by bank in favor of the depositor and credited to the account of
the depositor.
c. NSF customer check.
d. Service charge.
20. A proof of cash is used by an auditor to?
a. Comply with Philippines Auditing Practice Statements
b. Determine if there were any unauthorized disbursements or unrecorded deposits during
the reconciliation period
c. Prove the correctness of the cash balance in the client’s year-end statement of financial position
Q1 - Q4 - Prelim Exam
Q1Q1
-ACC5112
Q4
- Q4
- Prelim
- Prelim
- Auditing
Exam
Exam ACC5112
and
ACC5112
Assurance
- Auditing
- Auditing
- Concepts
and
and
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Assurance
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