Final answer:
The adjusted bank balance is a bank's balance sheet total after accounting for pending transactions. It includes both the assets, such as loans extended and reserves, and the liabilities like customer deposits. Singleton Bank's change in business plan, including a loan to Hank's Auto Supply, illustrates adjustments to its assets.
Step-by-step explanation:
The adjusted bank balance is a reflection of a bank's balance sheet after accounting for all transactions, including outstanding checks and deposits in transit. For a better understanding, let's consider Singleton Bank's modified business plan as an example. The bank's assets now consist of $1 million in reserves and a $9 million loan to Hank’s Auto Supply, while liabilities remain at $10 million in deposits. Adjusting the balance would require the bank to account for any pending transactions that have not yet been reflected in these stated amounts.
A bank’s balance sheet is a crucial financial statement that presents the bank's net worth through the listing of its assets and liabilities. Assets include valuable items like cash held in vaults and loans extended, such as the one to Hank's Auto Supply, while liabilities could be obligations like customer deposits. The difference between these assets and liabilities contributes to the bank’s capital, which is essentially its net worth.