The Standard Bank Confirmation, Developed Jointly by the AICPA, the American

question 92

Multiple Choice

The standard bank confirmation, developed jointly by the AICPA, the American Bankers Association, and the Bank Administration Institute, requests information about all of the following except:

• A) deposit balances.
• B) loan interest rates.
• C) loan balances.
• D) other deposit or loan accounts that may have come to the attention of the bank official.
• E) secondary endorsements.

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Definitions:

Effective Annual Rate

The real return on an investment, taking into account the effect of compounding interest over a year.

Annual Percentage Rate

The annual rate charged for borrowing or earned through an investment, inclusive of any fees or additional costs.

Periodic Interest

Interest that is paid or calculated at regular intervals over the life of a loan or investment.

Stated Interest

The interest rate declared on a bond or loan that represents the actual annual cost of borrowing to the borrower.