Which of the Following Are Primary Concerns of the Bank

question 147

Multiple Choice

Which of the following are primary concerns of the bank manager?

• A)maintaining sufficient reserves to minimize the cost to the bank of deposit outflows
• B)extending loans to borrowers who will pay low interest rates,but who are poor credit risks
• C)acquiring funds at a relatively high cost,so that profitable lending opportunities can be realized
• D)maintaining high levels of capital and thus maximizing the returns to the owners

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Definitions:

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold and inventory valuation.

Fixed Factory Overhead

Fixed factory overhead refers to those manufacturing costs that do not change with the level of production, including rent, depreciation, and salaries of permanent staff.

Absorption Costing

A method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.