Suppose That a New Customer Opens a Checking Account and a Saving

question 193

Multiple Choice

Suppose that a new customer opens a checking account and a saving account, placing $50,000 in each. Later, the bank makes a loan of $100,000 to a business firm. For this bank

• A)assets increased by $50,000 because the saving account is an asset, while liabilities increased by $50,000 because the checking account is a liability.
• B)assets increased by $100,000 because the checking and saving accounts are assets, and liabilities increased by $100,000 because the loan is a liability.
• C)assets increased by $100,000 because the loan is an asset, and liabilities increased by $100,000 because the checking and saving accounts are liabilities.
• D)assets remained unchanged but liabilities increased by $100,000 because of the loan.

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Definitions:

Company Beta

A measure of a company's stock volatility in comparison to the overall market volatility.

Acquisition

The act of gaining control over another company or business entity by buying it or merging with it.

Weighted Average Cost

A method of calculating the cost of goods available for sale that considers the cost of goods at varying times and at different purchase costs.

Computation

The process of performing mathematical calculations or processing information to achieve a result.