Which of the Following Would Be Considered an Extraordinary Item

question 42

Multiple Choice

Which of the following would be considered an extraordinary item on an income statement of a bank?

• A) Revenue from the sale of the bank's office building.
• B) Interest income when the spread is greater than 10%.
• C) Realized security gains.
• D) Collection on loans already charged off.
• E) All of the above would be considered extraordinary items.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer; it is often a minimal amount like $0.01 or $1.00.

Matures

The point in time when a financial obligation, such as a bond or loan, reaches its due date and the principal amount must be repaid to investors or creditors.

Subordinated Debt

A type of loan ranked below other loans with respect to claims on assets or earnings in the event of a liquidation or bankruptcy.

Appreciation

An increase in the value of an asset over time, often due to changes in market demand or supply, inflation, or other economic factors.