Question

Which sentence correctly describes deposit money? lila deposits her earnings from teaching children in a bank account. She has the peace of mind that her money will remain safe in the bank. She does not receive any interest from her savings account. She feels that transferring money through checks is unsafe. So she withdraws cash when she wants to lend money to someone.

Answer 1

When bank customers deposit money into a bank account, it is considered deposit money, which is a liability for the bank. Lila's bank account deposits from her teaching earnings fall under this category, and she can withdraw her money when needed. However, she does not receive interest from her savings account and prefers cash for lending money.

Step-by-step explanation:

When bank customers deposit money into a checking account, savings account, or a certificate of deposit, the bank views these deposits as liabilities. After all, the bank owes these deposits to its customers when they wish to withdraw their money. It is important to note that Lila's deposits into her bank account are a form of deposit money.

In the scenario provided, Lila deposits her earnings from teaching children into a bank account. This deposit money is considered a liability for the bank, and Lila can withdraw her money when she needs it. However, she does not receive any interest from her savings account, and she prefers to withdraw cash instead of using checks to lend money to someone.