Commercial Bank 3

  1. Banks generate their largeset portion of income from:
  2. Do loans fall into a category of Munis?
  3. What kind of account is the Reserve for loand lease losses?
    Contra-Asset Account
  4. A financial institution's bad-debt reserve as reported on its balance sheet is called:
    The Reserve for Loan and Lease Losses
  5. Noncash expense item on a bank's Report of Income designed to shelter a bank's current earnings from taxes and to help prepare for bad loans is called:
    Provision for possible loan losses
  6. When a bank serves as a security dealer for certain kinds of securities the value of these are usually recorded in what account on a bank's report of condition?
    Trading Account Securities
  7. What is the difference between noninterest income and noninterest expenses on a bank's report of income called:
    net noninterest income
  8. The account that is built up by annual noncash expense deductions and is subtracted from Gross Loans on the Report of Condition is:
    Reserve for Loan and Lease Losses
  9. One time only transactions that often involve financial assets or real property pledged as collateral behind a loan and upon which the bank has foreclosed affect a bank's account known as:
    Nonrecurring sales of assets
  10. The use of fixed assets, rather than financial, in order to increase earnings flowing to a bank's stockholders is known as:
    Operating Leverage
  11. Banks depend heavily upon borrowed funds supplied by customers with little owners' capital invested. This means that banks make heavy use of:
    Financial Leverage
  12. When a loan is considered uncollectible, the bank's accounting department will write it off the books by reducing which accounts?
    ALL & Gross Loans
  13. Common banking practice of selling those investment securities that have appreciated in order to reap a capital gain and holding onto those securities whose prices have declined is known as:
    Gains Trading
  14. Noninterest revenue sources for a bank are called:
    Fee Income
  15. Which asset is the largest on a bank's balance sheet?
  16. What financial service industry category is second to the banking industry in total assets held?
    Mutual Funds
  17. Which financial statement shows the revenues and expense of a bank over a set period of time?
    Report of Income
  18. FASB Rule 115 focuses primarily on bank:
    Investments in marketablle securities
  19. What is another name for undivided profits?
    Retained Earnings
Card Set
Commercial Bank 3
Commercial Bank 3