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Which of the following pertains to the characteristics of cash and cash equivalents account?

• An amount deposited in a bank

• A money set aside for the settlement of long-term debt

• Unrestricted in use for current operations

• Available for the purchase of any type of property, plant, and equipment

What is the treatment for the interest paid by the bank to the depositor’s account?

• A book reconciling item that is added to the book balance.

• A book reconciling item that is deducted from the book balance.

• A bank reconciling item that is deducted from the book balance.

• A bank reconciling item that is added to the book balance.

Burr Company reported the checkbook balance on December 31, 2024 at P5,000,000 and held the following items on the same date:

What amount should be reported as cash on December 31, 2024?

• 4,900,000

• 5,300,000

• 6,400,000

• 5,700,000

Visayas Company provided the following data for December:

What is the adjusted cash in bank?

• 1,375,000

• 1,310,000

• 1,322,000

• 935,00

Which of the following methods of accounting for doubtful accounts is permitted under GAAP?

• Direct write-off method

• Allowance method

• Both A and B

• Neither A nor B

Statement I: The interest rate to be used to compute for the interest income on a long-term receivable is the ____.

Statement II: The interest rate to be used to compute for the interest receivable on a long-term receivable is the ____.

• Stated interest rate; Market interest rate

• Stated interest rate; Stated interest rate

• Market interest rate; Market interest rate

• Market interest rate; Stated interest rate

Brownie Company provided the following accounts abstracted from the unadjusted trial balance at year-end:

What amount should be recognized as doubtful accounts expense for the current year?

• 640,000

• 610,000

• 160,000

• 130,000

On January 1, 2022, State Co. sold an equipment to Nation Co. Nation Co. issued a 3-year P400,000, 10% note to State Co. The note requires the interest to be paid annually every December 31 starting December 31, 2022 until the maturity of the note on December 31, 2026. The equipment has a cost of P1,000,000 and accumulated depreciation as of January 1, 2022 of P550,000. The prevailing interest rate for a note of this type is 11%.

Round off PV factors to four decimal places

At what amount shall the note be initially measured on January 1, 2022?

• 292,480

• 321,728

• 390,228

• 400,000

What method of accounting is used to account for investment in associate?

• Cost method

• Fair value method

• Equity method

• Consolidation method

Which of the following are true when bonds are sold at a discount?

I. The stated interest rate is higher than the effective interest rate on the date of purchase.
II. The stated interest rate is lower than the effective interest rate on the date of purchase.
III. The stated interest rate will be higher than the amount of cash received for interest.
IV. The interest income will be lower than the amount of cash received for interest.

• I and III

• I and IV

• II and III

• II and IV