An Entity That, as Part of Its Normal Business Operations

question 10

Multiple Choice

An entity that, as part of its normal business operations, makes loans or extends credit to the general public, is referred to as a:

• A) financial institution.
• B) savings and loan.
• C) federal reserve bank.
• D) FDIC.

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Definitions:

Unrealized Gain

Profits that have been earned on paper from an investment but have not been realized through a sale, and thus are not included in the income statement until realized.

Amortization

The gradual reduction of a debt or the allocation of the cost of an intangible asset over a period of time.

Fair Value Increments

Adjustments made to the book values of assets or liabilities to reflect their fair value at the time of acquisition in a business combination.

Bargain Purchase

A situation where the purchase price of a company is less than the fair value of its net identifiable assets.