Which of the following are reported as assets on a bank's balance sheet?A) borrowingsB) reservesC) savings depositsD) bank capital
Question
Which of the following are reported as assets on a bank's balance sheet?A) borrowingsB) reservesC) savings depositsD) bank capital
Solution
A bank's balance sheet is a financial statement that summarizes its assets, liabilities, and shareholders' equity at a specific point in time. Each of these components helps investors, creditors, and internal management understand how well a company is performing and areas of improvement.
A) Borrowings: These are not reported as assets on a bank's balance sheet. Instead, they are considered liabilities because they represent money that the bank owes to other entities.
B) Reserves: These are reported as assets on a bank's balance sheet. Reserves are funds that the bank holds as cash or deposits with the Federal Reserve Bank. They are assets because they represent resources that the bank can use to meet its obligations.
C) Savings Deposits: These are not reported as assets on a bank's balance sheet. Instead, they are considered liabilities. This is because the bank owes the money deposited into savings accounts to the account holders.
D) Bank Capital: This is not reported as an asset on a bank's balance sheet. Instead, it is part of the shareholders' equity section of the balance sheet. Bank capital represents the net worth of the bank or its value after all liabilities have been paid off.
So, out of the options given, only reserves are reported as assets on a bank's balance sheet.
Similar Questions
1. Which of the following are reported as assets on a bank's balance sheet? A) borrowings B) reserves C) savings deposits D) bank capital 2. Which of the following bank assets is the most liquid? A) consumer loans B) reserves C) state and local government securities D) U.S. government securities 3. Banks earn profits by selling with attractive combinations of liquidity, risk, and return, and using the proceeds to buy with a different set of characteristics. A) loans; deposits B) securities; deposits C) liabilities; assets D) assets; liabilities 4. When you deposit $50 in currency at Old National Bank A) its assets increase by less than $50 because of reserve requirements. B) its reserves increase by less than $50 because of reserve requirements. C) its liabilities increase by $50. D) its liabilities decrease by $50. 5. When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the bank's final balance sheet A) the assets at the bank increase by $800,000. B) the liabilities of the bank increase by $1,000,000. C) the liabilities of the bank increase by $800,000. D) reserves increase by $160,000. 6. Which of the following statements are TRUE? A) A bank's assets are its sources of funds. B) A bank's liabilities are its uses of funds. C) A bank's balance sheet shows that total assets equal total liabilities plus equity capital. D) A bank's balance sheet indicates whether or not the bank is profitable. 7. Which of the following statements is FALSE? A) A bank's assets are its uses of funds. B) A bank issues liabilities to acquire funds. C) The bank's assets provide the bank with income. D) Bank capital is recorded as an asset on the bank balance sheet. 8. Because checking accounts are liquid for the depositor than savings accounts, they earn interest rates. A) less; higher B) less; lower C) more; higher D) more; lower 9. Bank reserves include A) deposits at the Fed and short-term treasury securities. B) vault cash and short-term Treasury securities. C) vault cash and deposits at the Fed. D) deposits at other banks and deposits at the Fed. 10. Asset transformation can be described as A) borrowing long and lending short. B) borrowing short and lending long. C) borrowing and lending only for the short term. D) borrowing and lending for the long term.
Which of the following is/are considered an asset of a bank?
Which of the following statements is FALSE?A) A bank's assets are its uses of funds.B) A bank issues liabilities to acquire funds.C) The bank's assets provide the bank with income.D) Bank capital is recorded as an asset on the bank balance sheet
Which of the following balance sheet portfolio items is NOT a source of funds for a bank?I OverdraftsII Lease financeIII Call depositsIV Share capitalV Consumer loansVI CDVII Term deposits
The following are classified in the balance sheet as a current assets, except;a.Cashb.Buildingc.Accounts Receivabled.Cash equivalents
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