Final answer:
The correct option to complete the transaction is to credit another liability account for $920, balancing the double-entry accounting system. For the bank's T-account, the net worth is calculated as assets minus liabilities, resulting in a positive net worth of $220, indicating a healthy financial position.
Step-by-step explanation:
To address the student's initial question about the transaction involving an asset account and a liability account: when an accountant has debited an asset account for $920 and credited a liability account for $460, the remaining part of this transaction would involve balancing the accounts. The correct way to complete the recording of this transaction is Option 4: Credit another liability account for $920. This will ensure that the debits equal the credits, maintaining the balance in the double-entry accounting system.
About setting up a T-account balance sheet for a bank, here is how the example provided would be structured:
Assets
- Reserves: $50
- Loans: $500
- Government Bonds: $70
Liabilities
Net Worth
In this scenario, the bank's net worth can be calculated by subtracting the total liabilities from the total assets. So, the net worth is ($50 reserves + $500 loans + $70 government bonds) - $400 deposits = $220. This net worth is included on the liabilities side to ensure the T-account balances to zero. Therefore, the bank is in a healthy position as the net worth is positive.