Reasons Regulators Chose to Follow Regulatory Forbearance Rather Than to Close

question 37

Multiple Choice

Reasons regulators chose to follow regulatory forbearance rather than to close the insolvent S&Ls include all of the following except

• A) they had insufficient funds to close all of the insolvent S&Ls.
• B) they were friends with the S&L owners.
• C) they hoped the problem would go away.
• D) they did not have the authority to close the insolvent S&Ls.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in the net income or loss for the period.

Vertical Analysis

A financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Matching Principle

An accounting principle that dictates that expenses should be matched with the revenues they helped to generate in the same period.