Final answer:
Assets are increased with Debits and decreased with Credits. Bank deposits are characterized as assets on a personal balance sheet, while loans are characterized as liabilities. For a bank, deposits are liabilities and loans are assets.
Step-by-step explanation:
Assets are increased with Debits and decreased with Credits.
In the context of a personal balance sheet, you would characterize bank deposits as assets because they represent the money you have in the bank. Similarly, loans would be characterized as liabilities because they represent the money you owe to the bank.
For a bank's balance sheet, deposits are considered liabilities because the bank owes the depositors their money. Loans, on the other hand, are considered assets for the bank because they generate interest income and are expected to be repaid by borrowers.