Banks

question 22

Multiple Choice

Banks

• A)play a role in creating an asset that people can use as a medium of exchange.
• B)are financial intermediaries,but mutual funds are not financial intermediaries.
• C)are financial markets,as are bond markets.
• D)All of the above are correct.

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Definitions:

Time Period Assumption

An assumption that accountants can divide the economic life of a business into artificial time periods.

Economic Life

The expected period over which an asset remains useful to its owner or contributes to an enterprise's cash flows.

Artificial Time Periods

A division of operational time into smaller, manageable segments for accounting or reporting purposes, such as quarters or fiscal years.

Initial Recorded

Represents the initial entry or documentation of a financial transaction or asset in the accounting records of a business.