Final answer:
On a bank's balance sheet, government securities purchased by the bank are recorded as an asset under 'Securities'. These are low-risk investments and contribute to the bank's income through the payments they generate.
Step-by-step explanation:
When a bank buys government securities, they will appear on its balance sheet as a(n) asset under the category of "Securities". The acquisition of government bonds is an investment for the bank and is expected to produce a stream of payments in the future, similar to how loans generate interest income for the institution. These government securities are low-risk investment options, as they are backed by the assurance that the government will fulfill its debt obligations, though they may offer a relatively lower rate of interest compared to other investment types.