One Reason a Bank's Officer May Be Reluctant to Write

question 109

Multiple Choice

One reason a bank's officer may be reluctant to write off a past-due loan is that it will:

• A)Increase the bank's liabilities
• B)Decrease the bank's assets and capital
• C)Increase the bank's liabilities and assets, requiring more capital to be held
• D)Mean the bank will have to answer to an additional regulator

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Definitions:

Budgeted Goals

Predicted financial or operational targets that a company aims to achieve within a specific time frame.

Actual Performance

The real or achieved outcomes of a business activity or process, measured against its expected, budgeted, or standardized goals or parameters.

Controlling

In management, it refers to the process of monitoring performance against goals, identifying deviations, and taking corrective action to ensure that business objectives are achieved.

Cash Deficiency

A financial state where the cash available is not sufficient to cover the debts or liabilities owed, indicating potential liquidity problems.