Use the Following Balance Sheet for XYZ Bank,which Is One

question 63

Multiple Choice

Use the following balance sheet for XYZ Bank,which is one of many banks in a banking system.
Table 13.1-XYZ Bank balance sheet
-Refer to Table 13.1.With total reserves of $50,000 and a required reserve ratio of 10 percent,potential deposit creation for the banking system is equal to:

• A) $20,000.
• B) $50,000.
• C) $80,000.
• D) $300,000.

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Definitions:

Purchase Price Variances

The difference between the actual cost of purchased inventory and its standard or expected cost.

Currently Attainable Standard

This refers to a standard or benchmark that can be achieved under current operating conditions with reasonable efficiency.

Unfavorable Cost Variance

A variance that occurs when the actual cost exceeds the standard cost.

Favorable Cost Variance

A variance that occurs when the actual cost is less than standard cost.