When a Bank Keeps Dealer Reserves, the Reserves Are Primarily

question 48

Multiple Choice

When a bank keeps dealer reserves, the reserves are primarily used:

• A) to cover charge-offs.
• B) to increase bank profits.
• C) to increase dealer profits.
• D) to reduce taxes.
• E) to increase advertising revenues.

---

Definitions:

Costing Approach

A costing approach is a method or technique used to determine the cost of a product or service, which can include different methodologies like absorption costing or activity-based costing.

Finished Goods Inventory

Represents the stock of completed products that are ready to be sold but have not yet been sold to customers.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been subtracted, indicating how much contributes to covering fixed costs and generating profit.

Fixed Costs

Costs that do not vary with the level of production or sales, including rent, salaries, and insurance premiums.