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Question: the banks provisions for bad and doubtful debt amount to...

Question details

The bank's provisions for bad and doubtful debt amount to $20 million.  The bank writes off $18 million non-performing loans. 

As a result of the write off,  the gross loans ___________________, the net loans _____________________ and bank's equity _______________. 

 

A.

decreases by $18 million; decreases by $18 million; does not change.

B.

decreases by $20 million; decreases by $18 million; decreases by $2 million.

C.

does not change; decreases by $2 million; decreases by $2 million.

D.

decreases by $18 million; does not change; does not change.

E.

decreases by $18 million; increases by $18 million; does not change

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