Which of the Following Statements Is True

question 70

Multiple Choice

Which of the following statements is true?

• A)A positive financing gap means that the FI must fund it by using its cash and liquid assets or by raising funds in the money market.
• B)A negative financing gap means that the FI must fund it by using its cash and liquid assets or by raising funds in the money market.
• C)A positive financing gap means that the FI has excess liquidity.
• D)A negative financing gap means that the FI is in need of liquidity.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels of the business, allowing for more accurate budgeting and performance evaluation.

Direct Materials

Raw materials that are directly traced and integral to the manufacturing of a finished product.

Spending Variance

The difference between the budgeted or standard cost of something and the actual amount spent, often analyzed in budgeting and cost management.

Budgeting Formulas

Mathematical expressions used in the preparation of budgets to estimate future costs, revenues, and resources requirements.