Final answer:
Unexpired prepaid accounts are recorded as assets on a financial statement. Bank balance sheet assets may not be present as cash as they include loans and investments. The value of loans in the secondary market depends on the borrower's payment history, changes in interest rates, and their financial standing.
Step-by-step explanation:
When financial statements are prepared, unexpired prepaid accounts are recorded as assets. This is because they represent services or benefits to be received in the future for which payment has already been made. Prepaid accounts may include prepaid rent, insurance, or subscriptions, which provide future economic benefits, and thus are classified as assets on a balance sheet. Therefore, the correct answer is d) Assets.
The money listed under assets on a bank's balance sheet may not be in the bank because these assets can include loans made to customers and investments in securities, which means that the cash has been used to generate these other assets. The bank's assets are the financial instruments it holds or those that others owe to the bank, like loans and government securities, which are not physically present as cash in the bank. On the other hand, liabilities represent what the bank owes to others, such as customer deposits, which the bank is obligated to pay back.