In the consolidated balance sheet of the Bank of Canada, loans to chartered banks are:
A)a liability of the Bank of Canada and chartered banks.
B)an asset of the Bank of Canada and chartered banks.
C)a liability of the Bank of Canada and an asset for chartered banks.
D)an asset of the Bank of Canada and a liability for chartered banks.

Question

Quizplus · Accepted Answer

Loans to chartered banks are considered an asset for the Bank of Canada because they represent money owed to the Bank by the chartered banks. Conversely, these loans are a liability for the chartered banks as they represent money that the chartered banks owe to the Bank of Canada.

In the Consolidated Balance Sheet of the Bank of Canada