Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

3. John made two ATM transactions, but only one incurred a fee (Interac). Which of the following best explains why only one transaction had a fee?

ATM fees are randomly applied to transactions regardless of the ATM used.

One transaction was at his own bank's ATM (no fee), while the other was at an Interac network ATM (fee applies).

Fees are only charged if the transaction amount exceeds $100.

Both transactions were at Interac ATMs, but only the first transaction is ever charged a fee.

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Verified step by step guidance

Understand the concept of ATM fees: Banks typically charge fees for using ATMs that are not part of their own network. Transactions at your own bank's ATM are usually free, while transactions at ATMs outside your bank's network (such as Interac network ATMs) may incur fees.

Identify the key details in the problem: John made two ATM transactions, but only one incurred a fee. The explanation provided suggests that one transaction was at his own bank's ATM (no fee), while the other was at an Interac network ATM (fee applies).

Eliminate incorrect options: The first option, 'ATM fees are randomly applied,' is incorrect because fees are not applied randomly; they depend on the ATM network used. The third option, 'Fees are only charged if the transaction amount exceeds $100,' is also incorrect because fees are typically based on the ATM network, not the transaction amount. The fourth option, 'Only the first transaction is ever charged a fee,' is incorrect because fees are not limited to the first transaction.

Focus on the correct explanation: The correct answer is that one transaction was at his own bank's ATM (no fee), while the other was at an Interac network ATM (fee applies). This aligns with standard banking practices regarding ATM fees.

Summarize the reasoning: ATM fees are determined by the network of the ATM used. Transactions at your own bank's ATM are free, while transactions at ATMs outside your bank's network, such as Interac ATMs, typically incur fees. This explains why only one of John's transactions had a fee.