True or False (Correct the wrong answer) 1) Deposits are considered as assets in the bank’s balance sheet

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question one: True or False (Correct the wrong answer)
1) Deposits are considered as assets in the bank’s balance sheet
2) Credit risk in banks could occur duo to Inadequate income of lenders
3) Interest rate on cash credit is higher than interest rate on bank overdraft
4) Trading securities is one of the agency functions offered by commercial banks
5) Banks accept deposits in order to lend money to the borrowers
6) When banks accept deposits, it basically means they are lending money to the depositors
7) Cash and treasury management are services provided by commercial banks
8) Online banks could face risks linked to rapid technological changes
9) Bank regulation’s only objective is to protect the consumer
10) International banks have higher transaction costs than regular banks
11) Large commercial banks focus on earning fee income on nontraditional activities
12) Deposits are considered as liabilities in the bank’s balance sheet
13) Banks underwriting loans with the expectation that another party would likely bear the risk of the defa ult
can lead to a moral hazard
14) Credit risk in banks could occur because of the unwillingness of lenders to repay
15) Market risk is a considered a major risk for banks
16) A commercial banks deals with corporations as well as individuals
17) A debit card is always a better option than a credit card
18) A credit card is a payment card that deducts money directly from a consumer’s checking account to pay
for a purchase
19) Loans are considered as liabilities in the bank’s balance sheet
20) Commissions are very important revenue sources for banks and are classified as interest income

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