ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A deposit made into a bank is considered ____ of that bank.
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capital
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an asset
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an investment
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a liability
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Explanation:
Detailed explanation-1: -When bank customers deposit money into a checking account, savings account, or a certificate of deposit, the bank views these deposits as liabilities. After all, the bank owes these deposits to its customers, and are obligated to return the funds when the customers wish to withdraw their money.
Detailed explanation-2: -This is because it is your money that is in the hands of the bank. Therefore, since your money is an asset to you, it is classified as a debit in an accounting system.
Detailed explanation-3: -A bank’s balance sheet includes loans and investment as assets. Liabilities include deposits and borrowings.
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