Final answer:
In accounting, T-accounts maintain a balance between the assets and liabilities of a balance sheet. Asset accounts normally have a debit balance, while liabilities and equity accounts typically have a credit balance. A bank's T-account, specifically, lists assets including reserves and loans, and its liabilities are mostly customer deposits, with net worth ensuring a balanced record.
Step-by-step explanation:
A T-account represents the two sides of a company's balance sheet: assets on the left and liabilities on the right. In accounting, T-accounts are used to track debits and credits for financial transactions, helping to maintain the balance between these two fundamental elements of the balance sheet. Each T-account features a debit side on the left and a credit side on the right. The normal balance for asset accounts, such as Cash, Accounts Receivable, Supplies, and Prepaid Insurance, is a debit, which means an increase on the left (debit) side and a decrease on the right (credit) side. Contrarily, liability accounts and equity accounts, like Accounts Payable to various suppliers and Capital accounts, have their normal balance on the credit side, indicating an increase on the right (credit) side and a decrease on the left (debit) side.
In the case of a bank's T-account, assets include reserves and instruments like loans and U.S. Government Securities, whereas liabilities encompass deposits owed to customers. Net worth is accounted for on the liabilities side to ensure the T account reaches a zero balance. Accordingly, a bank's assets will always match the sum of its liabilities and net worth.