The Amount of Reserves That a Chartered Bank Wishes to Hold

question 123

Multiple Choice

The amount of reserves that a chartered bank wishes to hold is equal to:

• A)the amount of its demand deposits.
• B)the sum of its demand deposits and time deposits.
• C)its demand deposits multiplied by the desired reserve ratio.
• D)none of the above.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products or job orders, based on a set activity measure.

Raw Materials

Basic materials that are used in the production process to manufacture finished goods.

Finished Goods

Finished goods awaiting sale and not yet delivered to end-users.

Work in Process Inventory

Represents the total cost of unfinished goods currently being manufactured.