In the Early 2000s, Banks Took the Mortgages That They

question 30

True/False

In the early 2000s, banks took the mortgages that they owned, created mortgage-backed securities out of them, and sold them as safe investments.

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Definitions:

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts.

Sales Discounts

Reductions in sales price offered to customers, typically to prompt early payment or bulk purchases.

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period, ensuring the accounts are up to date.

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts offered.