Suppose a Transaction Changes the Balance Sheet of Wells Fargo

question 42

Multiple Choice

Suppose a transaction changes the balance sheet of Wells Fargo bank as indicated in the following T-account.

At this point,what percentage of the new deposits does Wells Fargo hold in reserves?

• A) 100 percent
• B) 10 percent
• C) 5 percent
• D) 1 percent

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Definitions:

Common Stock

Shares representing ownership in a company, giving holders voting rights and a share in the company's profits through dividends.

Consolidated

The act of combining financial statements from different entities within a corporate group into one single set of statements.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Additional Paid-In Capital

The amount of capital from shareholders that is more than the par value of the shares issued.