Chapter 34 — Self-Check Quiz
Twenty-six questions. Answers are in the collapsed block at the bottom — do the whole thing before you
open it.
Bellwether's figures: plan sales \$1,550,000** · operating profit **\$261,020 before \$69,500 of
debt service · period food sales \$86,400** across thirteen periods · Period 8 ideal usage **\$25,488
against actual \$27,202** · total leak exposure **\$53,122 · control program \$4,849 · contribution
margin \$19.37 per dinner cover across 260 dinner services.
Multiple choice
1. An internal control's product is:
- a) A deterrent
- b) A caught thief
- c) Trustworthy information
- d) A lower food cost percentage
2. Which of the four control functions does Bellwether's outside bookkeeper hold?
- a) Authorize
- b) Record
- c) Custody
- d) Reconcile
3. Which of these does not reduce sales?
- a) A void
- b) A comp
- c) A promotional discount
- d) A price override downward
4. Bellwether's cash-drop rule is a drop whenever the drawer holds:
- a) \$250 over its bank
- b) \$500 over its bank
- c) \$750 in total
- d) \$1,000 in total
5. Bellwether's over/short tolerance is:
- a) ±\$5.00, flat
- b) ±0.5% of cash sales, flat
- c) ±\$5.00 or 0.5% of cash sales, whichever is greater
- d) ±\$5.00 or 0.5% of cash sales, whichever is smaller
6. The Friday daily sales report accounts for \$8,279.00. Of that figure, the amount that is
actually Bellwether's revenue is:
- a) \$8,279.00
- b) \$7,040.60
- c) \$6,807.00
- d) \$6,580.00
7. On the investigation ladder, theft sits at rung:
- a) One
- b) Three
- c) Five
- d) Seven
8. Period 8's whole-book food variance was:
- a) +\$1,062, or 1.0 point
- b) +\$1,714, or 2.0 points
- c) +\$1,714, or 6.7 points
- d) +\$22,282, or 2.0 points
9. Seafood's ideal usage in Period 8 was \$3,420. Under the category threshold, the test that governs
it is:
- a) 5% of ideal usage, or \$171
- b) The \$250 dollar floor
- c) 3% of ideal usage, or \$103
- d) 1.0 point of food sales
10. Dry goods and pantry came in \$46 under theoretical. The correct first action is:
- a) Congratulate the kitchen
- b) Recount
- c) Move the surplus to the following period
- d) Reduce the par level
11. Sweethearting surfaces first on:
- a) The void report
- b) The comp report
- c) Item-level inventory usage compared against sales
- d) The reopened-check report
12. Comps above Bellwether's 1.0% target are worth, annually:
- a) \$174
- b) \$486
- c) \$8,680
- d) \$22,282
13. The chapter's total quantified leak exposure is:
- a) \$22,282
- b) \$38,451
- c) \$53,122
- d) \$69,500
14. The incremental annual cost of the control program is:
- a) \$233
- b) \$4,849
- c) \$26,561
- d) \$53,122
15. The largest single line on the leak list is:
- a) Measured food variance, \$22,282
- b) The five bar leaks, \$16,169
- c) Comps over target, \$8,680
- d) Cash loss, \$1,395
16. A reopened check that changed a tender type from card to cash at 1:12 a.m. is best described as:
- a) Proof of theft
- b) Proof of a mis-tender
- c) A question that deserves an answer
- d) Noise, since the page still balances
Short answer
17. Why is an over as important to record as a short? Give the information argument and the
culture argument.
18. Why does the chapter insist the daily sales report be completed while the building is still open,
rather than the next morning?
19. A drawer has opening banks of \$500, cash tenders per the point-of-sale system of \$705, cash tips
to the pool of \$96, and petty-cash paid-outs of \$40. It counts \$1,087.75. Compute expected in drawer and
the over/short, apply Bellwether's tolerance, and state what happens tonight.
20. Explain the greater-of rule at the category level using bakery and desserts, whose ideal usage
in Period 8 was \$1,488.
21. The whole-book test uses "whichever is smaller" while the category test uses "whichever is
greater." Explain why that is not a contradiction.
22. Why is a void invisible on the profit and loss statement while a comp is not? Name the two things
a comp does to the food cost percentage.
23. Period 8's meat-and-poultry variance was \$1,062, of which \$997 was explained on rungs one
through six. Express the residual as a percentage of that category's \$9,850 of ideal usage and say what
the number means.
24. Name the report on which each of these surfaces first: shorting; unrecorded sales; tip
manipulation.
25. Compute the break-even recovery rate for the \$4,849 control program against the \$53,122
exposure, and say in one sentence what the figure is for.
26. Convert the \$53,122 exposure into **dinner covers a night**, using \$19.37 of contribution margin
per dinner cover across 260 dinner services. Then do the same for the \$4,849 program.
Answer key
**1. (c) Trustworthy information.** A control produces a record. Theft prevention is a downstream side
effect of having records, not the definition of a control.
**2. (d) Reconcile.** The bookkeeper never touches cash, never signs an invoice, never approves a comp,
and never writes a schedule — which is exactly what makes them the only genuinely independent party in the
building's financial life. That independence is the whole value of the function.
**3. (a) A void.** A void removes an item from a check before the check closed, so no sale ever occurred
and there is no revenue to reduce. It is purely an audit item. Comps and discounts both reduce sales.
**4. (b) \$500 over its bank.** Plus a mandatory drop at the end of Saturday brunch. The point of the drop
is not primarily theft — it is that a drawer holding \$900 on a Friday is a robbery target and an
uncounted liability at once.
**5. (c) Whichever is greater.** On a Friday with \$612 of cash tenders, 0.5% is \$3.06, so the \$5.00
floor governs; on a Saturday with \$1,100 of cash, the tolerance is \$5.50.
**6. (d) \$6,580.00.** Of the \$8,279.00 that crossed the counter, \$460.60 belongs to the state,
\$75.00 belongs to whoever holds that gift certificate, and \$1,163.40 belongs to the staff. Only net
sales is revenue.
**7. (d) Seventh** — after stale cost cards, uncosted specials, menu-mix drift, purchasing,
over-portioning, and unrecorded waste.
**8. (b) +\$1,714, or 2.0 points.** \$27,202 − \$25,488 = \$1,714, which is +6.7% of ideal usage and
2.0 points of the \$86,400 of period food sales (31.5% actual against 29.5% ideal). Answer (c) confuses the
percentage of ideal usage with points of food sales; (d) is the annualized figure, \$1,714 × 13.
**9. (b) The \$250 dollar floor.** 5% of \$3,420 is \$171, which is less than \$250, so the floor governs
under the greater-of rule. Seafood's \$288 variance clears \$250 and fires — narrowly.
**10. (b) Recount.** A category that comes in under theoretical is almost always a count error, a
mis-extended invoice, or product counted into the wrong category. A gift is a mistake you have not found
yet.
**11. (c) Item-level inventory usage compared against sales.** Sweethearting leaves no trace on the sales
side — no void, no comp, no discount, no reopen — because the transaction never existed. It is visible only
from the inventory side.
**12. (c) \$8,680.** Comps ran 1.56% against a 1.0% target; 0.56 points of \$1,550,000 is \$8,680. \$174 is
the sample week's excess and \$486 is the week's total comps.
**13. (c) \$53,122** = \$22,282 + \$16,169 + \$8,680 + \$3,348 + \$1,395 + \$1,248.
**14. (b) \$4,849.** \$26,561 is what half the exposure is worth if you recover it.
**15. (a) Measured food variance at \$22,282** — 42% of the list on its own, and none of it requires a
dishonest employee to exist.
**16. (c) A question that deserves an answer.** It is two of §34.3's watch-for shapes at once — a reopen
after the business day and a tender-type change — and the ordinary explanations (a declined card paid in
cash, a wrong tender key corrected at close-out) are still the likely ones. If the answer is good you have
lost four minutes.
**17.** **Information:** an over means the drawer and the point-of-sale system disagree, which carries
exactly the same information as a short — somebody mis-tendered, mis-keyed, or gave wrong change. Recording
only shorts throws away half your data. **Culture:** if the only time a count gets written down is when it
is short, you have taught the staff that the count is a punishment rather than a measurement, and they will
manage the number instead of reporting it. A drawer \$8 over on Tuesday and \$8 short on Wednesday is a
training problem you can fix; a drawer recorded only when short is a mystery you never will.
**18.** Because the report's job is to make the night provable **while the people who handled the money are
still in the building.** A \$40 short found at 11:45 is three questions and an answer. The same \$40 found
at ten the next morning is a mystery and a memory, and the honest outcome is that you write it off.
**19.** Expected in drawer = \$500 + \$705 − \$96 − \$40 = **\$1,069.00.** Counted \$1,087.75, so the
drawer is **\$18.75 over.** Tolerance is the greater of \$5.00 and 0.5% of \$705 (\$3.53), so \$5.00
governs and the night is **outside tolerance** — but it is under \$25, so tonight it gets **noted and
initialed, and nothing else happens.** It becomes a review only if it is the third night outside tolerance
in a four-week period. Record the over exactly as carefully as you would record a short, and check whether
that \$40 paid-out had a receipt attached before the money left the drawer.
**20.** 5% of \$1,488 is only **\$74**, which is less than the \$250 floor, so the floor governs and the
category's actual \$63 variance stays silent. Without the dollar floor, a \$75 swing in a small category
would open an investigation every single period, forever — and a threshold that generates more work than
you will actually do teaches you to ignore your own reports.
**21.** They are answering different questions at different costs. The **whole-book** test is a
tripwire — it only decides whether you open the period's paperwork at all, and the cost of a false alarm is
one afternoon of reading documents you already own. You want it **sensitive**, so you take whichever test
trips first. The **category** test is a work-allocation rule — it decides which of six categories you
physically walk, and the cost of a false alarm is real time in a walk-in plus, eventually, the credibility
of the whole system. You want it **specific**, so you take whichever test is harder to trip. Sensitivity
where a look is cheap; specificity where a look is expensive.
**22.** A void removes an item that was never sold, so there is no revenue to reduce and nothing reaches
the statement. A comp removes revenue from a sale that **did** occur while the product cost stays in cost
of goods sold — so it **depresses the sales denominator and leaves the cost numerator intact**, moving both
halves of the food cost ratio the wrong way at once.
**23.** \$65 ÷ \$9,850 = **0.66%**, comfortably inside the roughly half-point honest error of a hand count.
It means there is nothing to investigate and there never was. An investigation opened at rung seven would
have spent a week damaging a relationship over \$65 of arithmetic noise while the \$997 sat in plain view on
four pieces of paper.
**24.** **Shorting** — over/short by drawer, by shift, by person. **Unrecorded sales** — inventory usage
against sales, plus the host-system cover count compared to the point-of-sale cover count, plus
check-number sequence gaps. **Tip manipulation** — the reopened-check report, specifically reopens that
change a tip amount, alongside charged-tip percentage by server.
**25.** \$4,849 ÷ \$53,122 = **9.1%.** The program pays for itself if it recovers a little over nine
percent of the identified exposure — which is the number to quote to anyone who objects that you will never
recover all of it. You will not. You do not have to.
**26.** \$53,122 ÷ \$19.37 = 2,743 covers ÷ 260 services = **10.5 dinner covers a night.** \$4,849 ÷
\$19.37 = 250 covers ÷ 260 services = **about one dinner cover a night.** The leak costs ten and a half
covers a night, every night; the program that addresses it costs one. That is the version of this chapter a
floor manager can hold in their head.