Which of the Following Is an Operating Target

question 101

Multiple Choice

Which of the following is an operating target?

• A) M1
• B) M2
• C) nonborrowed reserves
• D) the inflation rate

---

Definitions:

Contra Asset

An account that is used to reduce the value of a related asset, such as accumulated depreciation reducing the book value of fixed assets.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, indicating the side which increases the account.

Allowance Method

A financial method that estimates the value of debts unlikely to be collected by determining uncollectible accounts each period's end.

Allowance for Doubtful Accounts

A contra asset account that represents the estimated proportion of accounts receivable that may not be collectable.