Final answer:
In a classified balance sheet, the order of equity section items is common stock, retained earnings, accumulated other comprehensive income, and noncontrolling interest, which is option D. Money on a bank balance sheet represents lent out deposits and is not physically held. Factors such as payment history, interest rate changes, and borrower profitability affect the value of loans in the secondary market.
Step-by-step explanation:
The question concerns the classification and ordering of equity section items within a company's balance sheet. In a classified balance sheet, the equity section generally follows this order: first the amounts contributed by and owed to the owners, followed by earnings retained in the business, and then other components such as accumulated other comprehensive income and noncontrolling interest. Therefore, the correct ordering is common stock (d), retained earnings (a), accumulated other comprehensive income (b), and noncontrolling interest (c), which corresponds to option D. d, a, b, c.
The money listed under assets on a bank's balance sheet might not actually be in the bank because the bank engages in lending activities. The funds received as deposits are often lent out to borrowers, which is how banks earn interest income. This means that the cash reported as assets is not physically present in the bank's vaults but is represented by loans and other interest-earning assets.
When considering purchasing loans in the secondary market, various factors affect the price you're willing to pay. If a borrower has been late on a number of loan payments (a), you may pay less due to the increased risk of default. If interest rates have risen since the loan was made (b), you may pay less, because the loan's fixed interest rate is less attractive than current rates. Conversely, if the borrower is a firm that has declared a high level of profits (c), you might pay more due to their improved creditworthiness. Lastly, if interest rates have fallen (d), the loan is more attractive, and you may pay more for it.