Final answer:
The statement regarding excess of salary and interest allocations over profit indicating a loss is true. Banks earn money from interest on loans, meaning money in vaults implies less lending and profit. The idea that proprietors in a proprietary colony only collect profits is false.
Step-by-step explanation:
The statement that salary and interest allocations exceeding profit indicates a loss is true. This scenario occurs when the total expenses, including salaries, interest, and other operating costs, surpass the total revenues generated from the business operations. This results in a net loss for the period. For instance, if a company has made $100,000 in sales but has salary expenses of $80,000 and interest expenses of $30,000, the total expenses would amount to $110,000, which exceeds the total revenue, thus representing a $10,000 loss.
Banks rely heavily on the interest they earn from issued loans as their main source of income. The assertion that having more money stored in the bank's vault means less is available for lending, correlating to lower potential earnings from interest, is valid. Modern banking primarily uses deposits for lending, and having an excess of cash reserves that does not contribute to this process can indeed reduce a bank's profitability.
The notion that in a proprietary colony, proprietors only have the responsibility to collect profits is false. In history, proprietors had various obligations, including governing and developing the colony, not just profiting from it.