Banking Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

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What is generally considered the major non-credit cost for commercial customers?

Personnel expenses

Loan administration expenses

Check-processing costs

The major non-credit cost for commercial customers is typically considered to be check-processing costs. This cost arises from the various fees and resources required to process checks, which are still a common method of payment in many businesses. Check-processing involves labor, systems for check verification, handling, and reconciliation, as well as potential fees charged by banks for check clearing and processing services.

While personnel expenses and loan administration expenses are significant, they are often more directly associated with the credit services provided to customers. Fraud costs can also be impactful, but they tend to be more sporadic and contingent upon security measures, rather than a consistent, ongoing expense like check-processing costs. Thus, check-processing stands out as a recurring and predictable expense that commercial customers incur, making it the major non-credit cost in this context.

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Fraud costs

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