The 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:

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The 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. This is because it is an allowance set aside by the bank to prepare for potential loan defaults or write-offs. It reduces the bank's taxable income and can provide a cushion for future losses.

The Noncash Expense Item on a Bank's Report of Income