Final answer:
The question revolves around how an accounting event affects Delta Company's financial statements and the T-account, which represents the balance between assets, liabilities, and equity. For banks, assets include reserves and loans, while liabilities consist of deposits and equity. The net worth (equity) is positive for a solvent bank and negative for a bankrupt one.
Step-by-step explanation:
The student's question pertains to the impact of an accounting event on Delta Company's financial statements, specifically how it affects the equation Asset = Liabilities + Equity, as well as the Revenue and Expenses impacting Net Income, and ultimately the Statement of Cash Flows. In accounting, the T-account is used to visually represent this equation, where the left side shows assets and the right side shows liabilities and equity. For banks, T-accounts are particularly important as they depict the relationship between the bank's reserves, loans, and U.S. Government Securities as assets, and deposits and equity as liabilities and net worth.
In the case of a bank's T-account, assets such as reserves, bonds, and loans must always be equal to the liabilities (including deposits) plus the net worth (or equity). A healthy bank will have a positive net worth, while a bankrupt firm will have a negative net worth.