b Vouchers not yet replenished 1 Vouch supporting documents invoices etc 2

B vouchers not yet replenished 1 vouch supporting

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official. b. Vouchers not yet replenished 1. Vouch supporting documents, invoices, etc. 2. Examine vouchers as to approval by authorized officials, signature of payee, etc. c. NSF checks 1. Determine reason why NSF checks are still on hand. 2. Confirm directly with drawers. d. Return of excess travel advance 1. Examine liquidation of travel advance as reported and determine accuracy of the amount returned. 2. Vouch supporting invoices. e. Sale of money orders 1. Examine latest report of the Pampanga Co. to establish proper accountability. 2. Confirm directly with the Pampanga Co. all unreported money orders sold as well as unissued as of November 10.
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Substantive Tests of Cash 9-7 f. Vouchers subsequently presented 1. Examine vouchers as to date, approval, amount and nature of expenditures. 2. Confirm directly with employees those items representing wage advance. g. Book balance of the Petty Cash Fund. 1. Trace to the general ledger the balance of the fund. 9-8. Requirement (1) Bank Reconciliation, June 30 Bank Books Balances, June 1 ........................................... P18,000 P30,170 (derived) Additions: Deposits in transit ................................. 16,000 Note and interest collected ................... 1,860 Recording error (944 – 854) ................ 90 Deductions: Outstanding checks ............................... (6,000) NSF check ............................................ (4,000) Service charge ....................................... (120 ) Correct cash balance .................................... P28,000 P28,000 Requirement (2) Adjusting entry Accounts receivable ..................................... 4,000 Service charge expense ................................ 120 Accounts payable .................................. 90 Interest revenue .................................... 60 Notes receivable ................................... 1,800 Cash ...................................................... 2,170 9-9. Form Company Requirement (a) Form Company Bank Reconciliation Statement 6.30.15 Balance per bank statement P 27,000 Add: Cash on hand 9,228 Total 36,228 Less: Outstanding checks Check no. 192 P 1,040
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9-8 Solutions Manual to Accompany Applied Auditing, 2014 Edition 193 720 194 816 195 692 3,268 Balance as adjusted P 32,960 Balance per books P 34,700 Add: Note collected by bank 500 Total 35,200 Less: Shortage 2,240 Balance as adjusted P 32,960 Requirement (b) Shortage is P2,240 . Requirement (c) The cashier attempted to conceal the shortage by: (1) Understating the outstanding checks (a) Excluding check #192 P1,040 (b) Underfooting list of outstanding checks 200 (2) Adding instead of deducting note collected by bank thereby covering up 1,000 Total P2,240 Requirement (d) Suggestions to improve internal control: (1) Bank reconciliation statement should be prepared by someone other than the cashier. (2) Collections should be deposited intact. 9-10. Jonas Company Analysis of the bank statement and cash account will reveal the following: a. Deposit in-transit, June 30: ....................................... P2,700 b. Checks outstanding: # 62 ........................................................................... P 900 # 68 ........................................................................... 1,300 P2,200 c. Interest earned on bank balance ................................ P 100 Bank Reconciliation, June 30 Bank Book
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Substantive Tests of Cash 9-9 Ending June balance ............. P22,580 Ending June balance ............. P22,980 Deposits in-transit ................. 2,700 Interest earned ....................... 100 Checks outstanding: #62 ................................. (900) #68 ................................. (1,300 ) Correct cash balance ............. P23,08 P23,08 The following journal entry must be made by Jonas Company: Cash .................................................................................. 100 Interest revenue ................................................. 100 9-11. Apple Company Requirement (1) (a) Deposits in-transit – All deposits (#51 through #56) except #56 have been recorded by the bank; therefore, the deposit in-transit is: #56 , P3,500 . This amount can be verified as: P2,000 + P190,000 – P188,500 = P3,500 . (b) Checks outstanding: Inspection of the check numbers reveals that the following are outstanding: #121, P1,000; #177, P2,500; #178, P3,000; and #179, P1,500; total, P8,000 . This amount can be verified as: P6,000 + P198,000 – P196,000 = P8,000 . Requirement (2) Bank Books
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