In Accounting,emphasis Is Placed on Determining Net Income

question 30

True/False

In accounting,emphasis is placed on determining net income.In finance,the primary emphasis also is on net income because that is what investors use to value the firm.However,a secondary consideration is cash flow because that's what is used to run the business.

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Definitions:

Required Reserve Ratio

The minimum percentage of deposits that a bank must hold in reserve and not lend out.

Excess Reserves

Funds that banks hold over and above the required reserve ratio set by the central bank, often earning interest.

Checkable Deposits

Bank accounts from which individuals can deposit and withdraw money using checks, ATM transactions, and electronic payments.

Reserve Requirement

The minimum fraction of customer deposits that each bank must hold as reserves, rather than lending out, as mandated by the central bank.