Which of the following is classified as a liability for a commercial bank?

Question

Quizplus · Accepted Answer

Demand deposits are classified as a liability for commercial banks because they represent funds that the bank owes to its depositors, who can withdraw them at any time. Liabilities are obligations that a company must fulfill, and demand deposits fall under this category.

Additionally, A, B, and D are not liabilities for a commercial bank. Reserves, or funds set aside by the bank to cover potential losses or withdrawals, are classified as assets. Commercial loans are also assets, as they represent money owed to the bank by borrowers. Deposits with the Federal Reserve are also assets, as they represent funds placed with a government entity.

Which of the Following Is Classified as a Liability for a Commercial