A Bank Has $100,000 in Checkable Deposits and $30,000 in Reserves

question 72

Multiple Choice

A bank has $100,000 in checkable deposits and $30,000 in reserves. If the required reserve ratio is 10%, what is the amount of required reserves?

• A) $0
• B) $10,000
• C) $20,000
• D) $30,000

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Definitions:

ABC

A costing method that identifies activities in an organization and assigns the cost of each activity to products or services according to the actual consumption.

Overhead Costing Systems

Methodologies used to allocate indirect costs (overhead) to products or services, which may vary depending on the costing approach (e.g., traditional costing or activity-based costing).

Overhead Allocation Base

A metric used to assign indirect costs to cost objects, often based on time, labor, or machine hours.