Banking Under a System of Fractional Reserves Is A(n)

question 32

Multiple Choice

Banking under a system of fractional reserves is a(n)

• A)inherently risky business that is unsafe regardless of bank management.
• B)inherently risky business that is relatively safe under prudent management.
• C)fairly safe business unless management is irresponsible.
• D)fairly safe business with no unusual risks.

Identify the role of auxiliary petty cash records and vouchers in managing petty cash.

Describe the process and accounting treatment for change funds and their differences from petty cash.

Understand how to establish and adjust a petty cash fund.

Learn how to reconcile the petty cash fund by accounting for cash shortages and overages.

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