The Largest Liability on the Balance Sheet of Most Banks

question 150

Multiple Choice

The largest liability on the balance sheet of most banks is its

• A)loans.
• B)holdings of securities.
• C)deposits with the Federal Reserve.
• D)checking account and savings account deposits of its customers.
• E)vault cash.

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Definitions:

Just in Time

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

Credit Instrument

The evidence of indebtedness.

Promissory Note

A promissory note is a financial instrument in which one party promises in writing to pay a determinate sum of money to another, either at a fixed or determinable future time or on demand of the payee.

Time Draft

A type of credit instrument in international trade where payment is deferred for a specified period after the buyer accepts the draft.