Final answer:
A $12,000 cash advance is accounted as both an asset (cash) and liability (unearned revenue) in company records. Depositing large loans into bank accounts, such as the $8.1 million loan discussed, increases the money supply due to reserve banking mechanisms.
Step-by-step explanation:
The occurrence described involves a cash advance from a client to a company for services to be provided. In accounting, this transaction is recorded as a liability for the company because it represents services yet to be rendered. Upon receipt, it increases the company's cash and adds an obligation, typically recorded as 'unearned revenue' or 'deferred income' on the balance sheet.
About the broader banking and financial system, when companies like Jack's deposit substantial loans into their banking account, such as the $8.1 million mentioned, this action can lead to an increase in the money supply. This is seen when Singleton Bank lends to Hank's Auto Supply, which then deposits the loan, altering the bank's deposits and reserves. The detailed process is illustrated in various figures like 13.10, 14.10, 27.10, 13.8, 14.8, and 27.8 within the provided information. First National, in this case, has to comply with reserve requirements but can lend out the rest, facilitating the multiplication of money through the banking system.