The Difference Between a Bank's Reserves and Its Required Reserves

question 20

Multiple Choice

The difference between a bank's reserves and its required reserves is:

• A) profits.
• B) net interest income.
• C) excess reserves.
• D) vault cash.

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Definitions:

Depreciation

Systematically dividing the cost of a tangible asset across its life of utility.

Financial Statements

Papers detailing a business's financial status, comprising the income statement, balance sheet, and statement of cash flows.

Net Income

The company's resulting profit when all deductions, including expenses and taxes, are made from the total income.

Classified Balance Sheet

A financial statement that organizes assets, liabilities, and equity into subcategories for detailed understanding.