Question

On a bank's T-account:________.

Answer 1

Answer:

d. reserves are assets and deposits are liabilities.

Explanation:

On a bank's T-account the reserves created by the banks is the banks amount and is an asset for the bank because it is the contribution made by the bank to meet out the contingencies so in case these reserves are not utilised by the bank then it remains as an income for the bank .

Similarly the deposits made by the customers in the bank is a liability for the bank because this amount of deposit made by the customers belongs to the customers and are supposed to be returned by the banks at a later date.