Which of the Following Statements Is Correct? I

question 92

Multiple Choice

Which of the following statements is correct? I. The Fed can periodically and without warning examine member commercial banks to ensure that they are conforming to current banking standards.
II) The Fed helps the government collect certain tax revenues and aids in the purchase and sale of government securities.

• A) I only
• B) II only
• C) Both I and II
• D) Neither I nor II

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Definitions:

Cash Basis

The cash basis is an accounting method where revenues and expenses are recognized only when cash is received or paid, as opposed to when they are incurred.

Adjusting Entries

Journal entries made in accounting records at the end of an accounting period to update the balances of certain accounts.

Financial Statements

Formal records of the financial activities and position of a business, including the balance sheet, income statement, and cash flow statement.

Accounting System

A structured process of collecting, recording, summarizing, and reporting financial transactions of a business or individual.