9 The AA Company’s cash in bank for the year ended December 31, 2022, following information are available: November 30 December 31 Cash per books P530,500 ? Cash per bank statements 510,000 520,500 Deposits in transit 260,100 ? Outstanding checks 162,600 220,400 Bank service charges 2,500 2,700 Insufficient fund check 10,500 12,000 Company's notes receivable collected by bank 130,000 125,000 The bank statement and the company’s cash records show the following totals: Checks and debit memos per bank statement P470,500 Cash receipts per cash record 490,500 Cash disbursements per cash records 450,000 Deposits and credit memos per bank statement 481,000 Additional information: A P40,000 book debit error in November was corrected in December. A P25,000 withdrawal of AB Corporation was erroneously credited by the bank in company’s account in December. A P12,500 disbursement check was recorded in cash disbursement journal in November at P2,500. The error was discovered and corrected in December. A P10,000 customer collection was recorded in December at P1,000, the error was detected and corrected in December. There were unrecorded disbursement in the month of December. Statement 1: The adjusted receipts as of December 31, 2022 is P487,600. Statement 2: The amount of unrecorded disbursement for the month December is P162,600. Group of answer choices Only statement 1 is true Only statement 2 is true Both statements are false Both statements are true

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The AA Company’s cash in bank for the year ended December 31, 2022, following information are available:

	November 30	December 31
Cash per books	P530,500	?
Cash per bank statements	510,000	520,500
Deposits in transit	260,100	?
Outstanding checks	162,600	220,400
Bank service charges	2,500	2,700
Insufficient fund check	10,500	12,000
Company's notes receivable collected by bank	130,000	125,000

The bank statement and the company’s cash records show the following totals:

Checks and debit memos per bank statement	P470,500
Cash receipts per cash record	490,500
Cash disbursements per cash records	450,000
Deposits and credit memos per bank statement	481,000

Additional information:

A P40,000 book debit error in November was corrected in December.
A P25,000 withdrawal of AB Corporation was erroneously credited by the bank in company’s account in December.
A P12,500 disbursement check was recorded in cash disbursement journal in November at P2,500. The error was discovered and corrected in December.
A P10,000 customer collection was recorded in December at P1,000, the error was detected and corrected in December.
There were unrecorded disbursement in the month of December.

Statement 1: The adjusted receipts as of December 31, 2022 is P487,600.

Statement 2: The amount of unrecorded disbursement for the month December is P162,600.

Group of answer choices

Only statement 1 is true

Only statement 2 is true

Both statements are false

Both statements are true

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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