Considering the Methods Available to the FDIC for Dealing with a Failed

question 9

Multiple Choice

Considering the methods available to the FDIC for dealing with a failed bank, the depositors of the failed bank should:

• A)Be indifferent between the two since it really does not matter to them which method is used
• B)Prefer the purchase and assumption method since the deposits over $250,000 will also be protected
• C)Prefer the payoff method because they will have access to their funds earlier
• D)Prefer the payoff method since a lot less paperwork is involved for the depositor

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Definitions:

Adjusting Journal Entry

A record documented at the closing of an accounting cycle to distribute revenues and expenses to the appropriate period they took place in.

General Ledger

A general ledger is a comprehensive record of a company's financial transactions over the life of the organization, serving as the primary source for preparing financial statements.

Supplies Expense

Costs associated with the consumption of supplies necessary for the daily operations of a business, recognized as an expense in the accounting period in which they are used.

Inventory

The entire inventory of products and materials maintained by a business for selling or manufacturing purposes.