When $1 Million Is Deposited at a Bank, the Desired

question 24

Multiple Choice

When $1 million is deposited at a bank, the desired reserve ratio is 20 percent, and the bank chooses not to make any loans but to hold excess reserves instead, then, in the bank's final balance sheet, ________.

• A) the assets at the bank increase by $1 million
• B) the liabilities of the bank decrease by $1 million
• C) reserves increase by $200,000
• D) liabilities increase by $200,000

---

Definitions:

Safeguarding Inventory

Measures and policies implemented to protect company inventory from theft, damage, and other losses.

Physical Devices

Tangible pieces of hardware that are used for specific functions, often within technological or manufacturing settings.

Inventory Turnover

The relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory.

Purchase Order

An official document issued by a buyer committing to pay the seller for the supply of specific products or services at agreed prices.