Select the Balance Sheet Account(s) That Would Be Affected by a Policy

question 17

Multiple Choice

Select the balance sheet account(s) that would be affected by a policy choice at the same time as the cost of goods sold income statement account.

• A) Accounts receivable
• B) Inventories
• C) Accrued expenses
• D) Property, plant and equipment

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Definitions:

Excess Reserves

The capital reserves held by a bank or financial institution in excess of what is required by regulators, providing a cushion against potential financial instability or liquidity needs.

Banking System

The network of financial institutions that provide banking services, including accepting deposits, providing loans, and managing payment systems.

Fractional Reserve Banking

A banking system where banks hold only a fraction of the deposits as reserves, using the remainder for loans and advances.

Federal Reserve

The central banking system of the United States, which oversees the country's monetary policy, regulates banks, maintains financial stability, and provides financial services to the government.