A Depository Institution Is a Firm That Takes Deposits From_________

question 33

Multiple Choice

A depository institution is a firm that takes deposits from_________ and makes loans to___________ .

• A) firms; households
• B) firms; other firms
• C) households and firms; other households and firms
• D) households; firms

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Definitions:

Non-interest-bearing Note

A promissory note in which no interest is earned or paid over the life of the note, with the borrower repaying only the face value of the note.

Straight-line Method

A depreciation method that allocates an equal portion of the cost of a fixed asset to each year of its useful life.

Troubled Debt Restructuring

The process of modifying the terms of a debt agreement due to the debtor’s financial difficulties to enhance the likelihood of repayment.

Extraordinary Gains

Gains that are both unusual and infrequent in nature, typically reported separately in financial statements to provide clarity on a company's ordinary income.