Which of the Following Is True Regarding Entities Considered Banks

question 8

Multiple Choice

Which of the following is true regarding entities considered banks under the UCC?

• A) Savings and loans and trust companies are considered banks, but credit unions are not.
• B) Savings and loans and credit unions are considered banks, but trust companies are not.
• C) Trust companies and credit unions are considered banks, but savings and loans are not.
• D) Savings and loans, credit unions, and trust companies are all considered banks.
• E) Only an entity holding itself out as a "bank" is considered a bank under the UCC, and therefore neither savings and loans, credit unions, nor trust companies are considered banks.

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Definitions:

Compensatory Stock Option

An employee benefit option that gives the right to purchase company stock at a discount.

Compensation Expense

The total amount of cash and non-cash payments that businesses must make to employees, including salaries, bonuses, and benefits.

Paid-in Capital

The total amount of cash and other assets received from shareholders in exchange for stock, including amounts above the nominal value (or par value) of the shares.

Historical Cost Principle

An accounting principle that states assets should be recorded and reported at their original purchase price.