If Total Assets Equal $345,000 and Total Stockholders' Equity Equal

question 251

Multiple Choice

If total assets equal $345,000 and total stockholders' equity equal $140,000, then total liabilities must equal

• A) $485,000.
• B) $205,000.
• C) $140,000.
• D) There is not enough information given to determine this.

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Definitions:

Reserve Requirement

A regulation that sets the minimum reserves each bank must hold to customer deposits and notes, intended to ensure bank liquidity and financial stability.

Excess Reserves

Funds held by banks over and above the legally mandated requirements to back deposits.

Demand Deposits

Bank accounts from which deposited funds can be withdrawn at any time without any notice to the bank, such as checking accounts.

Federal Reserve Board

The governing body of the Federal Reserve System, responsible for overseeing the United States' central bank policies, including regulating banks and setting interest rates.