Final answer:
The checking account balance of a depositor, as recorded by the bank, is regarded as a liability on the bank's balance sheet because the bank is obligated to repay this amount to the customer.
Step-by-step explanation:
The depositor's checking account balance in the bank records is a liability. This is because when bank customers deposit money into a checking account, savings account, or a certificate of deposit, the bank must hold that money and make it available for withdrawal, meaning it owes this amount to its customers.
A bank's balance sheet lists both assets and liabilities, where assets are items of value that are owned and can be used to produce something, such as cash or property, while liabilities are debts or obligations, such as deposits the bank is required to pay back to its customers. Therefore, when customers deposit money, it becomes a liability for the bank.