A company maintains the asset account Cash on its books while the bank maintains a reciprocal account which is
A) a contra-asset account.
B) a liability account.
C) also an asset account.
D) an owner's equity account.

Question

Quizplus · Accepted Answer

The bank views the cash deposited by a company as a liability because it owes this amount back to the company. The bank's obligation to return the funds makes it a liability on the bank's books.

A Company Maintains the Asset Account Cash on Its Books