Question

On any given day, it is unlikely that the balance in the cash account on the depositor's general ledger (or books) will be the same as the bank balance.

a) True
b) False

Answer 1

It is true that there will likely be a difference between the depositor's ledger and bank balance due to items like outstanding checks and bank fees. Singleton Bank's T-account is an example of how banks record deposits as liabilities and loans as assets, while an individual's personal balance sheet would record deposits as assets and loans as liabilities.

Step-by-step explanation:

The statement that it is unlikely for a depositor's general ledger balance to match the bank balance on a given day is true. There are various reasons such as outstanding checks, deposits in transit, and bank fees that could cause these differences. For instance, Singleton Bank's T-account illustrates the basic structure of a bank's balance sheet, showing assets on one side and liabilities and net worth on the other. An individual would note bank deposits as an asset on their personal balance sheet, but for a bank, these would be liabilities. Conversely, loans an individual owes are liabilities, whereas loans the bank has issued are considered assets.