In a Loan Participation,which of the Following Is/are True

question 14

Multiple Choice

In a loan participation,which of the following is/are true?
I. The loan buyer has no part in the original underlying credit agreement,even after purchase of the loan.
II. If the selling bank fails,the loan buyer's claim against the selling bank may be treated as unsecured.
III. In the event the selling bank fails,the original borrower's deposits may be used to reduce the loan amount without any proceeds going to the loan buyer.

• A)I only
• B)II only
• C)II and III only
• D)I and II only
• E)I,II,and III

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Definitions:

Manufacturing Overhead

All manufacturing costs other than direct materials and direct labor, includes costs like factory rent, utilities, and machine depreciation.

Applied to Production

Costs that are allocated or assigned to goods that are being produced, often involving direct labor, materials, and overhead.

Overapplied

Refers to a situation where the amount of overhead allocated to products or jobs is more than the actual overhead incurred.

Underapplied

Underapplied refers to a situation where the allocated costs are less than the actual costs incurred, often relating to overhead in manufacturing.