Answer:
It is customary for a feeder fund to keep all client fees
Explanation:
Complete question:
Assume the following general flow of documents in an accounting system. Reply to the following question:
"Source Documents --> Journals --> Ledgers"
The auditors are concerned about source documents that reflect valid transactions that have not been recorded in the journals. Which procedure would be most effective?
(1) Trace from source documents to journals.
(2) Vouch from journals to source documents.
Either (1) or (2).
Answer:
(1) Trace from source documents to journals.
Explanation:
Tracing is the method of tracking the transaction back to the source document in accounting records. Transaction failures are monitored and auditors are often used to ensure whether transactions have been properly reported.
Tracing relates to the compilation and the follow-up to the record of an financial transaction (the source document).
Tracing checks to see that the transactions that happened in the financial reports are registered. Therefore it would be most effective to translate "Trace documents from source into journals."
If the legal reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will rise by $6,000 and the monetary multiplier will increase from 4 to 10. The correct answer is D.
Answer:
A. 3.21 years
Explanation:
In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:
In year 0 = $7,500
In year 1 = $1,100
In year 2 = $1,640
In year 3 = $3,800
In year 4 = $4,500
If we sum the first 3 year cash inflows than it would be $6,540
Now we deduct the $6,540 from the $7,500 , so the amount would be $960 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $4,500
So, the payback period equal to
= 3 years + $960 ÷ $4,500
= 3.21 years
In 3.21 yeas, the invested amount is recovered.
