Multiple Choice
Which of the following is generally considered the most important source of funding for new businesses?
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1. Introduction to Accounting
Types of Accounting
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A traditional brick-and-mortar bank is classified as which type of bank?
A
Investment bank
B
Online-only bank
C
Central bank
D
Commercial bank
Verified step by step guidance1
Understand the classification of banks: Banks are categorized based on their functions and services. Common types include commercial banks, investment banks, central banks, and online-only banks.
Define a commercial bank: A commercial bank primarily provides services such as accepting deposits, offering loans, and facilitating everyday financial transactions for individuals and businesses.
Analyze the characteristics of a brick-and-mortar bank: A brick-and-mortar bank operates physical branches where customers can conduct transactions in person, which aligns with the definition of a commercial bank.
Compare the other options: Investment banks focus on financial services like underwriting and mergers, online-only banks operate exclusively online, and central banks manage monetary policy and currency issuance. None of these match the description of a brick-and-mortar bank.
Conclude that a traditional brick-and-mortar bank is classified as a commercial bank based on its physical presence and primary services offered.
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