Question
5-1. What are the principal accounts that appear on a bank's balance sheet (Report of Condition)?5-2. Which accounts are most important and which are least
5-1. What are the principal accounts that appear on a bank's balance sheet (Report of Condition)?5-2. Which accounts are most important and which are least important on the asset side of a bank's balance sheet?5-3. What accounts are most important on the liability side of a balance sheet?5-4. What are the essential differences among demand deposits, savings deposits, and timedeposits?5-5. What are primary reserves and secondary reserves, and what are they supposed to do?5-6. Suppose that a bank holds cash in its vault of $1.4 million, short-term government securities of$12.4 million, privately issued money market instruments of $5.2 million, deposits at the FederalReserve banks of $20.1 million, cash items in the process of collection of $0.6 million, and depositsplaced with other banks of $16.4 million. How much in primary reserves does this bank hold? Insecondary reserves?5-7. What are off-balance-sheet items and why are they important to some financial firms?5-8. Why are bank accounting practices under attack right now? In what ways could financial institutions improve their accounting methods?5-9. What accounts make up the Report of Income (income statement of a bank)?5-10. In rank order, what are the most important revenue and expense items on a Report of Income?
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