Far Eastern University

• INSTITUTE 2014

• PRE COMPREHENSIVE EXAMINATION 1/4 LET’S GO! 1) On December 31, 2020, Babe Time Corporation had cash accounts at three different banks. One account balance is segregated solely for a January 15, 2021 payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance. How should these accounts be reported in Babe Time’s December 31, 2020 classified statement of financial position? A. The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as a current liability. B. The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability. C. The segregated account should be reported as a noncurrent asset, and the regular account should be reported as a current asset net of the overdraft. D. The segregated and regular accounts should be reported as current assets net of the overdraft. 2) Which of the following should be considered cash? A. Certificate of deposit C. Money market instruments B. Money orders D. Treasury bills 3) Which of the following cannot be shown as part of cash in the current assets section of the balance sheet? A. Compensating balance not leally restricted C. Cash deposit with utility company B. Regular payroll account D. Check paid by depositor in payment of past due account 4) Which of the following statements is incorrect in relation to imprest petty cash fund