Final answer:
Without specific details of transaction (D) on 5/11, one cannot definitively determine the effect on the A/P—Bellhaven Bank account or the Cash account. The provided information discusses changes in assets and deposits for Singleton Bank but does not directly answer the student's question. The categorization of bank deposits and loans varies in personal versus bank balance sheets.
Step-by-step explanation:
The student's question pertains to the effect of a particular transaction on the accounts of a bank. When analyzing the Bank account (deemed as A/P—Bellhaven Bank) and the Cash account for a transaction, to determine the change in these accounts, we need information about the nature of the transaction. For instance, if the bank issues a loan, its assets (cash) would decrease while its loans (an asset as well) would increase. Without specifics of transaction (D) on 5/11, we cannot definitively state whether they both increase, both decrease, or if one increases and the other decreases.
The given text talks about a change in the bank's balance sheet, where the bank's assets now include $1 million in reserves and a $9 million loan to Hank's Auto Supply with a stable $10 million in deposits. This indicates a redistribution of assets within the balance sheet, but does not directly answer the student's question about the effects of a particular transaction. Therefore, without further context or specific details of transaction (D), one cannot provide a direct answer.
Moreover, personal balance sheets differ from bank balance sheets in how deposits and loans are categorized. While individuals consider the money they place in a bank as an asset, banks view it as a liability because it represents money they owe to depositors. Loans are considered assets to a bank, as they are expected to receive future payments from them. This differentiation in categorization also makes it complex to assess the effect of transaction (D) directly without additional information.