One aspect of bank accounting is that many liabilities of banks are
A)assets of other persons and businesses in the economy.
B)also liabilities of other persons and businesses in the economy.
C)not matched by liabilities of most other banks.
D)not actually owed to any other person or business in the economy.

Question

Quizplus · Accepted Answer

Many of the liabilities of banks, such as deposits, are assets of individuals and businesses in the economy. This means that if a bank were to fail or become insolvent, it would not only impact the bank itself but also the individuals and businesses that hold accounts with the bank. Therefore, it is important for banks to carefully manage their liabilities and ensure they have enough assets to cover them.

One Aspect of Bank Accounting Is That Many Liabilities of Banks