Final answer:
A balance sheet is an accounting tool that lists assets and liabilities of a bank. It is affected by every account in each transaction because every transaction involves changes in assets, liabilities, or both.
Step-by-step explanation:
A balance sheet is an accounting tool that lists assets and liabilities of a bank. It is affected by every account in each transaction because every transaction involves changes in assets, liabilities, or both. For example, when a bank receives a deposit from a customer, it increases its liabilities (deposits) and its assets (cash or reserves).
Similarly, when a bank provides a loan to a borrower, it increases its assets (loan receivable) and offsets it with an equal increase in liabilities (deposits created as a result of the loan). So, every transaction affects both sides of the balance sheet, ensuring that it stays balanced at all times. The balance sheet provides a snapshot of a bank's financial condition at a given point in time and helps investors, creditors, and regulators assess the bank's financial health and solvency.