Question

The top three contributors to non-interest income is “Other Non-Interest Income”, which includes fees from safe deposit boxes and ATM fees, "Fiduciary Activities", and "Service Charges on Deposit Accounts".

True

False

Which financial statement manipulation technique is described in the following sentence:

A bank pays off Federal Reserve borrowings just prior to the reporting date since the perception of that such borrowing indicates weakness.

A-Off-Balance Sheet Activities

B-Window Dressing

C-Preferred Stock

D-Nonrecurring Sale of Assets

Answer 1

1st Question --- Answer is True because these items like safe deposit boxes and atm fee and other services for which banks charge on deposits and fiduciary activities are all fall under the non interest income because banks are charging from depositors and Not the incomes that earned by bank on which they supposed to get interest, so the answer is TRUE.

2nd Question -- Answer is " A " ( off - balancesheet activities) , because eventhough the borrowings is the part of balance sheet but the pay off prior to the reporting is not the part of the balancesheet as the liability decreases and it reduces borrowings in the balancesheet but here the question is that the perception behind borrowing is weakness and which do not impact balancesheet at all regardless of the item name is borrowings but still not the balancesheet's part so the answer is "off balance sheet activities "- A option.

B - window dressing is not the correct answer because this manipulates the amounts of the balancesheet and display the manipulated figures to the external users and hence not matching with this question at all.

C.- Not correct because this is a mode of raising money and not the mode of debt or borrowing so this is all the way incorredt.

D - is also incorrect because the concerned item is borrowings but this is sale of assets of Nonrecurring and also not relating with each other hence it is incorrect.