Which of the Following Statements Is Correct If a Bank

question 111

Multiple Choice

Which of the following statements is correct if a bank is holding excess reserves?

• A)It is in a position to make additional loans.
• B)Its reserves exceed its loans.
• C)It is making above-normal profits.
• D)Its actual reserves are less than its targeted reserves.
• E)Its loans to customers exceed its required loans.

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Definitions:

Prepaid Services

Expenses paid in advance for services which are to be received in the future.

Unearned Fees

Income received by a business for services not yet performed or goods not yet delivered.

Journalize

The process of recording transactions in a company's journal, detailing the financial transactions of a business in chronological order.

Supplies Account

An account used in accounting to track the cost of supplies purchased and used by a business within a specific accounting period.