What Is the Key Reason Why Financial Institutions Can Transform

question 44

Multiple Choice

What is the key reason why financial institutions can transform assets and encourage transfer of funds?

• A) They can work individually with savers' funds.
• B) They can use their own funds for investment.
• C) They can invest the dividends.
• D) They have economies of scale.

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Definitions:

Accounts Receivable

Receivables from customers for goods or services that have been used or delivered, but remain unpaid.

Insurance Expense

The cost incurred by a business or individual for purchasing insurance coverage, recognized as an expense in financial statements.

Trial Balance

A report listing all the balances in each general ledger account, ensuring debits equal credits for accuracy in accounting.

Account Balance

The amount of money present in a financial account, calculated as the total credits minus the total debits.