If the Value of Bank's Loans Declines,what Is the Corresponding

question 45

Multiple Choice

If the value of bank's loans declines,what is the corresponding reduction in a liability entry that the bank makes?

• A) Deposits are reduced by the amount of the decline in the value of the loan.
• B) Borrowings are reduced by the amount of the decline in the value of the loan.
• C) Net worth is reduced by the amount of the decline in the value of the loan.
• D) Cash items in the process of collection are reduced by the amount of the decline in the value of the loan.

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