When a Bank Suspects That a $1 Million Loan Might

question 89

Multiple Choice

When a bank suspects that a $1 million loan might prove to be bad debt that will have to be written off in the future the bank

• A)can set aside $1 million of its earnings in its loan loss reserves account.
• B)reduces its reported earnings by $1,even though it has not yet actually lost the $1 million.
• C)reduces its assets immediately by $1 million,even though it has not yet lost the $1 million.
• D)reduces its reserves by $1 million,so that they can use those funds later.

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Definitions:

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A struggle for social justice in the United States during the 1950s and 1960s, aimed at ending racial segregation and discrimination against African Americans.

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The era immediately following the end of a major conflict, often marked by societal changes and reconstruction efforts.