In Financial Markets, a "Living Will" Is

question 22

Multiple Choice

In financial markets, a "living will" is:

• A) a set of instructions of how a bank failure should be carried out.
• B) a set of instructions of the order of repaying shareholders.
• C) a list of steps that must be taken by all banks in the event of insolvency.
• D) how bank bond and shareholders should divide a bank's remaining assets after insolvency.
• E) a set of instructions regarding succession in the event of a bank president's death.

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Definitions:

General Journal

The primary accounting record used for recording all day-to-day financial transactions of a company.

General Ledger

The master set of accounts that summarize all transactions occurring within an entity, serving as the main source for financial reporting.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, according to the rules of double-entry accounting.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.