It Is Imperative That Banks Maintain a Reputation for Safety

question 33

Multiple Choice

It is imperative that banks maintain a reputation for safety in order that

• A)regulators can reduce their efforts.
• B)bank runs can be reduced or prevented.
• C)customers will not be afraid to ask for loans.
• D)stockholders can earn a high rate of return.

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Definitions:

Cost Centres

Parts of an organization that do not directly generate revenue but incur costs, such as departments or divisions, which are important for budgeting and cost control.

Reportable Segments

Operating segments of a business that meet specific criteria requiring separate reporting under financial reporting standards.

Subsidiary Financial Statements

Financial statements that detail the financial status and performance of a subsidiary company, separate from its parent company's statements.

Management Approach

A principle in financial reporting that allows an entity to use its internal management structures and processes as the basis for organizing and presenting its financial information.