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

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

5. John made two ATM transactions, but only one incurred a fee (Interac). Why is this the case?

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

One transaction was at his own bank's ATM, which typically does not charge a fee, while the other was at a different bank's ATM (Interac), which does.

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

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

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Verified step by step guidance

Understand the context of ATM transactions and fees: Banks often charge fees for using ATMs that are not part of their network. These fees are typically referred to as Interac fees in Canada.

Identify the key factors affecting ATM fees: The problem mentions that fees are charged based on the ATM's ownership (own bank vs. other bank) and potentially the withdrawal amount exceeding $100.

Clarify the scenario: John made two transactions at Interac ATMs, but only one incurred a fee. This suggests that one transaction was at his own bank's ATM (which does not charge fees for its customers), while the other was at a different bank's ATM (Interac), which does charge fees.

Analyze the fee application criteria: The problem states that fees are charged if the withdrawal amount exceeds $100. Verify whether this condition applies to John's transactions.

Consider the possibility of random fee application: The problem also mentions that ATM fees can be randomly applied. This could explain why only one transaction incurred a fee despite both being at Interac ATMs.