Statement I: Time Deposits That Have an Original Maturity of Less

question 302

Multiple Choice

Statement I: Time deposits that have an original maturity of less than 18 months have a legal reserve requirement of 3%.
Statement II: The Board of Governors may not raise the reserve requirement on demand deposits above 18%.

• A)Statement I is true and statement II is false.
• B)Statement II is true and statement I is false.
• C)Both statements are true.
• D)Both statements are false.

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Definitions:

Cost Basis

The original value or purchase price of an asset or investment, used to calculate capital gains or losses for tax purposes.

Accumulated Depreciation

The total depreciation costs applied to a fixed asset from the time of its acquisition.

Fair Market Value

The price at which a willing buyer and a willing seller, both possessing reasonable knowledge of relevant facts, would exchange an asset.

Journal Entry

A record in the books of accounts that represents a business transaction, involving at least two accounts to record the financial activity.