If Writing Off a Large Loan Reduces the Balance in the Allowance

question 64

Multiple Choice

If writing off a large loan reduces the balance in the allowance for loan losses account too much,the principal regulatory agency:

• A)reduces the provision for loan loss expense.
• B)transfers funds to the account from retained earnings.
• C)reduces the number of loans being sanctioned.
• D)increases the provision for loan loss deduction.
• E)removes the reserve from the financial statement.

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