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Creditors claims on assets are called ________

User Jeanmartin
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Final answer:

Creditors' claims on assets are referred to as liabilities. These are included on the liabilities side of a bank's T-account, opposite the assets side which holds loans and government bonds among other assets.

Step-by-step explanation:

Creditors' claims on assets are called liabilities. In the context of a bank, assets may include cash in vaults, reserves held at the Federal Reserve Bank, loans made to customers, and bonds.

When a bank purchases bonds, such as those issued by the U.S. government, these bonds function as an asset because the bank will receive a stream of payments in the future. Government bonds are considered low-risk because the government is virtually certain to pay off the bonds.

Assets, including bonds, are part of what is held on the left side of a T-account, with liabilities and net worth on the right side. The net worth is the difference between total assets and total liabilities and is included on the liabilities side, ensuring the T-account balances.

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