When the Fed Sells U

question 109

Multiple Choice

When the Fed sells U.S.government securities to a member bank,the immediate effect on that bank's balance sheet is a(n) :

• A)decrease in assets and an increase in liabilities.
• B)increase in assets and a decrease in liabilities.
• C)increase in both assets and liabilities.
• D)decrease in both assets and liabilities.
• E)change in the type of assets the bank is holding,but no change in liabilities.

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Definitions:

Net Income

The amount of earnings left over after all expenses, including taxes and cost of goods sold, have been subtracted from total revenue, indicating the financial success or profitability of a company over a specified period.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, significantly impacting a company's financial position.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the IFRS Foundation and the International Accounting Standards Board to ensure global consistency and transparency in financial reporting.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a framework of accounting standards, principles, and procedures.