To obtain net loans from gross loans the following items must be subtracted:
A) unearned income
B) reserve for loan losses
C) all loans with maturities beyond 5 years
D) a and b

Question

Quizplus · Accepted Answer

To obtain net loans from gross loans, both unearned income (A) and reserve for loan losses (B) must be subtracted. Unearned income refers to income received but not yet earned, and reserve for loan losses is an allowance for potential loan defaults. Loans with maturities beyond 5 years (C) are not subtracted in this calculation.

To Obtain Net Loans from Gross Loans the Following Items