Cash and Cash Equivalents Activity

To be reported as part of cash and cash equivalents, the cash and cash equivalent must be:

• Unrestricted in use for current operations
• Available for the purchase of property, plant and equipment
• Set aside for liquidation of long-term debt
• Deposited by bank

All of the following can be classified as cash and cash equivalents, except:

• Redeemable preference shares acquired and due in 60 days
• Commercial paper held and due for repayment in 90 days
• Equity instrument
• Bank overdraft

If material, deposits in foreign bank which are subject to foreign exchange restriction shall be classified

• Separately as current asset with appropriate disclosure classified
• Separately as non-current asset with appropriate disclosure
• Separately as current asset without appropriate disclosure
• Separately as non-current asset without appropriate disclosure

Which is not considered as a cash equivalent?

• A three-year treasury note maturing on October 30, 2020 purchased by the entity on September 15, 2020
• A three-year treasury note maturing on October 30, 2020 purchased by the entity on June 30, 2020
• A 90-day treasury bill
• A 60-day money-market placement

Which item should be excluded from cash and cash equivalents in the current year-end statement of financial position?

• The minimum cash balance in the entity’s current account which is maintained to avoid service charges
• A check issued by the entity on December 27, 2020 but dated January 15, 2021
• Time deposit which matures in one year
• A customer’s check denominated in a foreign currency

At the end of the current year, an entity had various checks and papers in its safe. Which item should not be included in its cash account in the current year-end statement of financial position?

• € 30,000 cash in current account
• Past promissory note issued in favor of the entity by its President
• Another entity’s P225,000 check payable to the entity dated December 15, 2020
• The entity’s undelivered check payable to a supplier dated December 31, 2020

Unreleased checks, which are checks drawn before the end of reporting period but held for later delivery to creditors

• Shall be treated as outstanding checks
• Shall be restored to the cash balance
• Shall be treated as outstanding checks if the date is shortly after the end of reporting period
• Shall be treated as outstanding checks if they are ultimately encashed

The petty cash fund account under the imprest fund system is debited

• Only when the fund is created
• When the fund is created and everytime it is replenished
• When the fund is created and when the size of the fund is increased
• When the fund is created and when the size of the fund is decreased

When a petty cash fund is used, which of the following is true?

• The balance of the petty cash fund should be reporting in the statement of financial position as a long-term investment
• The petty cashier’s summary of petty cash payments serves as a journal entry that is posted to the appropriate general ledger account
• The reimbursement of the petty cash fund should be credited to the cash account
• Entries that include a credit to the cash account should be recorded at the time the payments from the petty cash fund are made

A cash short or over account

• Is not generally accepted
• Is debited when the petty cash fund proves out over
• Is debited when the petty cash fund proves out short
• Is a contra account for cash