Question

Given the list of accounts below, identify which of them would appear on a balance sheet?

1) Assets
2) Liabilities
3) Equity
4) Revenue
5) Expenses

Answer 1

A bank's balance sheet lists assets and liabilities. Assets include cash, reserves, loans, and bonds. Liabilities include deposits made by customers. Net worth, or bank capital, is calculated by subtracting liabilities from assets.

Step-by-step explanation:

A bank's balance sheet lists assets and liabilities. Assets are something of value that the bank owns, such as cash in its vaults, reserves held at the Federal Reserve bank, loans made to customers, and bonds. Liabilities are what the bank owes to others, such as deposits made by customers. Net worth, also known as bank capital, is calculated by subtracting liabilities from assets. On a bank's T-account, assets will always equal liabilities plus net worth.