Required Reserves Are Liabilities of a Bank

question 41

True/False

Required reserves are liabilities of a bank.

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Definitions:

Operating Fund

A fund used to cover the day-to-day operational expenses of an organization.

Capital Fund

A reserve of capital that can be used for specific purposes, often to fund long-term investment projects or to cover future liabilities.

Restricted Fund Method

An accounting principle used by non-profit organizations, where donations or grants are kept in separate accounts and are spent only according to donors' stipulations.

Capital Fund

A financial resource that is used for the purchase of fixed assets or for significant investment in a business, not consumed in normal operations.