When a Bank Grants a Loan to a Customer Who

question 77

Multiple Choice

When a bank grants a loan to a customer who then keeps the funds in her checking account at that bank, the bank's

• A) actual reserves will increase.
• B) required reserves will increase.
• C) actual reserves will decrease.
• D) excess reserves will stay the same.

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Definitions:

Overhead Costing Systems

Methodologies used to allocate indirect costs (overhead) to products or services, which may vary depending on the costing approach (e.g., traditional costing or activity-based costing).

Overhead Allocation Base

A metric used to assign indirect costs to cost objects, often based on time, labor, or machine hours.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire factory or plant, applied to all production units irrespective of the department in which they were produced.