Final answer:
An individual sees bank deposits as assets and loans as liabilities on their personal balance sheet, while a bank views deposits as liabilities and loans as assets on its balance sheet. This is reflective of the opposing creditor-debtor relationships between the individual and the bank.
Step-by-step explanation:
The major difference between bank deposits and loans as assets and liabilities for an individual compared to a bank lies in the perspective of who is the creditor and who is the debtor. For an individual, bank deposits represent an asset because they reflect money that the individual can claim from the bank. This is money the individual has lent to the bank and the bank owes back to the person, commonly with interest. On the other hand, loans for an individual are a liability; they are funds that the individual has borrowed and must repay to the bank, typically with interest over time.
Conversely, for a bank, this characterization is flipped. A bank considers the deposits it holds as liabilities because it owes these amounts of money to its depositors. In contrast, loans issued by the bank are considered assets because these are funds that the bank has lent out and expects to be repaid with interest, generating income for the bank.