When some item on a bank's balance sheet changes, there must be at least one other change somewhere else to maintain balance.

Question

Quizplus · Accepted Answer

This is the fundamental principle of double-entry accounting. Every transaction has two impacts, and the total impact must balance out so that the balance sheet remains in balance. For example, if a bank issues a loan to a customer, the loan asset on the balance sheet will increase, and the customer's deposit liability will increase on the liability side to represent the funds deposited into their account.

When Some Item on a Bank's Balance Sheet Changes, There