The Basis of All Receivables and Collections Is Actual Net

question 28

Multiple Choice

The basis of all receivables and collections is actual net sales, which is equal to ______.

• A) sales minus any returns.
• B) sales plus any returns.
• C) sales minus returns only if they are 90 days late.
• D) sales plus returns only if they are 90 days late.
• E) None of the above

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Definitions:

Required Reserve Ratio

The fraction of deposits that banks are obligated to hold in reserve, either in their vaults or at the central bank, and not loan out.

Excess Reserves

The funds that banks hold over and above the required reserve ratio set by the central bank.

Money Supply

The overall sum of financial resources present in an economy at a given moment.

Open Market Operations

are actions taken by central banks to buy or sell government securities in the open market to control the money supply and influence interest rates.