A Bank's Reserves Include

question 65

Multiple Choice

A bank's reserves include

• A) the cash in its vault plus the value of its depositors' accounts.
• B) the cash in its vault plus its deposits held at a Federal Reserve bank.
• C) the cash in its vault plus any gold held for the bank at Fort Knox.
• D) its common stock holdings, the cash in its vault, and any deposits at a Federal Reserve bank.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Credit Sales

Sales transactions where the payment is deferred to a future date, as opposed to cash sales where payment is made immediately.

Raw Materials

The basic materials and substances used in the initial stages of production before being transformed into final products.

Direct Labor Cost

The total cost of wages for labor directly involved in the production of goods or services.