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The TACITURN Company had weak internal control over its cash transactions.

Facts about its


cash position at November 30, 2015 were as follows:
The cash books showed a balance of P94,508, which included undeposited receipts. A credit of
P500 on the banks records did not appear on the books of the company. The balance per bank
statement was P77,750. Outstanding checks were no. 8420 for P581, no. 8422 for P750, no. 8430
for P1,266, no. 8621 for P954, no. 8623 for P1,034 and no. 8632 for P726.
The cashier stole all undeposited receipts in excess of P18,972 and prepared the following
reconcillation:
Balance per books, Nov. 30, 2015
Add: Outstanding checks
8621
8623
8632

P94,508
P954
1,034
726

Less: Undeposited receipts


Balance per bank, Nov. 30, 2015
Less: Unrecorded credit
True cash, Nov. 30, 2015
1.) What is the correct amount of cash that should be on hand for deposit on November 30,
2015?
A. P23,069
B. P18,972
C. P22,569
D. P22,069
2.) How much cash was stolen by the cashier?
A. P3,597
B. P3,097
C. P4,097
D. P0
3.) The cashier attempted to conceal his theft by
I.
Not listing all outstanding checks
II.
Underfooting outstanding checks shown on the reconciliation
III.
Adding an item to the bank balance that should be deducted from the book
balance.
A.
B.
C.
D.

I and II only
II and III only
I and III only
I, II and III

2,214
96,722
18,972
77,750
500
77,250

4.) Taking only the information given, which of the following internal control deficiencies
allowed the cashier to steal and conceal the theft?
A. The cashier is also responsible for preparing the reconciliation
B. No one other than the cashier is responsible for tracing cash receipts to the deposits in
the bank
C. Both A and B
D. Neither A nor B
5.) What is the adjusted cash balance as of November 30, 2015?
A. P95,008
B. P91,411
C. P94,008
D. P87,814

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