On the Fed's balance sheet an item in the process of collection
A)is an asset.
B)is a liability.
C)represents funds the Fed has promised to pay to a bank that has presented a check to be cleared.
D)represents an overdue discount loan to a commercial bank.

Question

Quizplus · Accepted Answer

An item in the process of collection on the Fed's balance sheet is an asset. It represents funds that have been credited to the Fed's account by another bank but have not yet been fully collected. Once the funds are collected, the item in the process of collection is removed from the Fed's balance sheet.

On the Fed's Balance Sheet an Item in the Process