Asked by
Leslie Leola
on Nov 16, 2024
Verified
A bank loans Benjamin's Print Shop $130,000 to remodel a building near campus to use as a new store. On their respective balance sheets, this loan is
A) an asset for the bank and a liability for Benjamin's Print Shop.The loan increases the money supply.
B) an asset for the bank and a liability for Benjamin's Print Shop.The loan does not increase the money supply.
C) a liability for the bank and an asset for Benjamin's Print Shop.The loan increases the money supply.
D) a liability for the bank and an asset for Benjamin's Print Shop.The loan does not increase the money supply.
Balance Sheets
Financial statements that summarize a company's assets, liabilities, and shareholders' equity at a specific point in time.
Asset
An item of value owned by an individual or corporation, expected to provide future benefit or revenue.
- Explain the impact of loans and deposits on a bank's balance sheet.
Verified Answer
VM
Learning Objectives
- Explain the impact of loans and deposits on a bank's balance sheet.