If a Bank Decides That It Must Write Off All

question 59

Multiple Choice

If a bank decides that it must write off all or part of the value of a loan, what is the corresponding reduction in a liability entry that the bank makes?

• A)Deposits are reduced by the amount of the loan write off.
• B)Borrowings are reduced by the amount of the loan write off.
• C)Net worth is reduced by the amount of the loan write off.
• D)Cash items in the process of collection are reduced by the amount of the loan write off.

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Definitions:

Isotope

Variants of a particular chemical element which differ in neutron number, and consequently in mass, but share the same chemical properties.

Skeletal Remains

The framework of bone structures left after the soft tissues have decayed away, often analyzed in forensic and archaeological contexts.

Uranium Isotope

Variants of the uranium atom that have the same number of protons but different numbers of neutrons in their nuclei.

Atomic Weapons

Weapons that derive their destructive power from the release of atomic energy through processes involving nuclear fission, fusion, or a combination of both.