Table 16-2 -Refer to Table 16-2

question 119

Multiple Choice

Table 16-2
$\begin{array}{|c|c|}\hline \text { Assets } & \text { Liabilities } \\\hline \text { Reserves }+\$ 8,000 & \text { Deposits }+\$ 8,000 \\\hline\end{array}$
-Refer to Table 16-2.Suppose a transaction changes a bank's balance sheet as indicated in the following T-account,and the required reserve ratio is 10 percent.As a result of the transaction,the bank can make a maximum loan of

• A) $0.
• B) $800.
• C) $7,200.
• D) $8,000.

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Definitions:

Direct Labor Budget

A direct labor budget is a financial plan that estimates the total cost of direct labor required to meet the production needs of a business.

Direct Labor-hours

The total hours worked directly on the production of goods.

Merchandise Purchases Budget

A detailed plan used by a merchandising company that shows the amount of goods that must be purchased from suppliers during the period.

Required Purchases

The quantity of goods a company needs to buy to meet its production plans and sales forecast.