The following data were taken from your current working papers in connection

with your audit of the Cascade Companys financial statements for the year ended
December 31, 2013.
Cash account consists of the following items:
Petty cash fund
Security Bank checking account
Allied Bank current account
Total per GL

P 25,000
(37,500)
344,250
P331,750

a. The count of the cashiers accountability on January 2, 2014, revealed total

bills and coins of P9,000. Unreplenished vouchers for various expenses
totaled P16,000, of which P3,000 pertains to January 2014.
b. On December 29, 2013, a check for P87,500 was drawn against Security
Bank current account resulting in bank overdraft of P37,500. The check was
picked up by the supplier on January 3, 2014.
c. Bank reconciliation statement prepared by the cashier for the Allied Bank
account follows:
Bank balance
Add: Deposit in transit
Bank service charges
Total
Less: Outstanding checks
Check No.
214
219
225
228
Book balance
@

P310,500
P61,250
1,250
Amount
P 2,500
20,750
6,000
8,500

62,500
373,000
@

28,750
P344,250

Check certified by the bank in December 2013.

All reconciling items were traced to the bank statement. Further investigation
indicated that the deposits in transit include a customers post-dated check
amounting to P40,000. The check represents a collection from account customer
for sales made in the middle of October 2013.

QUESTIONS:
Based on the application of the necessary audit procedures and appreciation of the
above data, you are to provide the answers to the following:
1.

How much is the adjusted balance of petty cash fund as of December 31,
2013?
a. P12,000
b. P13,000
c. P9,000
d. P16,000

2.

How much is the adjusted Allied Bank current account as of December 31,
2013?
a. P336,500
b. P305,500
c. P296,500
d. P330,250

3.

How much is the cash shortage as of December 31, 2013?

a. P46,500
b. P6,500
c. P9,000
d. P0

4.

How much is the adjusted cash as of December 31, 2013?

a. P355,500
b. P398,500
c. P367,500 d. P358,500

5.

An auditor would consider a cashiers job description to contain compatible

duties if the cashier receives remittance from the mailroom and also prepares
the
a. Daily deposit slip.
c. Remittance advices.
b. Prelist of individual checks.
d. Monthly bank reconciliation.