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

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?

Both transactions were at his own bank's ATM, but fees are charged randomly.

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

Interac fees apply only to deposits, not withdrawals.

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

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Verified step by step guidance

Step 1: Understand the concept of ATM fees. Banks typically charge fees for transactions made at ATMs that do not belong to the customer's own bank. These fees are often referred to as Interac fees in Canada.

Step 2: Analyze the scenario. John made two ATM transactions, but only one incurred a fee. This suggests that the fee is not random and is based on specific conditions.

Step 3: Evaluate the options provided. The first option suggests fees are charged randomly, which is unlikely as banks have clear policies regarding ATM fees. The third option states fees apply only to deposits, which is incorrect because fees can apply to withdrawals as well. The fourth option mentions fees are charged for transactions exceeding $100, which is not a standard policy for ATM fees.

Step 4: Focus on the correct explanation. The second option states that one transaction was at John's own bank's ATM (no fee), while the other was at a different bank's ATM (Interac fee applies). This aligns with standard banking practices where fees are charged for using ATMs outside of the customer's bank network.

Step 5: Conclude that the correct explanation is based on the location of the ATM used for the transaction. Transactions at the customer's own bank's ATM typically do not incur fees, while transactions at other banks' ATMs often do.