When Jane Brown writes a $100 cheque to her nephew (who lives in another province), Ms. Brown's bank ________ assets of $100 and ________ liabilities of $100.

Question

Quizplus · Accepted Answer

When Jane Brown writes a cheque, her bank's assets decrease because the bank will eventually have to transfer $100 to another bank to cover the cheque. Similarly, the bank's liabilities decrease because the amount it owes to Jane (as part of her account balance) decreases by $100.

When Jane Brown Writes a $100 Cheque to Her Nephew