The Idea That Banks Hold Only a Portion of Deposits

question 186

Multiple Choice

The idea that banks hold only a portion of deposits and lend the rest out is called the:

• A) fractional reserve banking system.
• B) partial banking system.
• C) double-entry bookkeeping system.
• D) loan-maximization system.

---

Definitions:

Net Cash Flow

The amount of money being transferred in and out of a business, reflecting the company's operating, investing, and financing activities over a period.

Absorption Costing

A cost accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Division Managers' Salaries

Compensation paid to individuals overseeing distinct business units or divisions within a larger organization.

Segment Reports

Financial reports that break down a company's operations, revenues, and expenses by distinct segments, such as geographical regions or product lines.