Final answer:
Issuing financial instruments causes both the assets and liabilities of ADI to increase. Assets increase due to the expectation of future cash flows from the new claims, and liabilities increase due to the new obligations created for the instrument holders.
Step-by-step explanation:
When ADI (Authorised Deposit-taking Institutions) issues financial instruments to customers on a balance sheet, it represents the transaction as such; the assets of the ADI increase because they now have an additional claim on another entity. This can be in the form of loans or securities that are expected to bring in future cash flows. Concurrently, the liabilities of the ADI also increase because they have now created a new obligation to the holder of the instrument. This is typically represented as a deposit or a form of short-term borrowing depending on the nature of the financial instrument issued.
However, this does not impact the assets and liabilities directly in terms of decrease, which are options 'c' and 'b', respectively. Therefore, the correct answers are 'a Assets increase and 'd' Liabilities increase for the student's question on how ADI's issuing of financial instruments affects their balance sheet.