A bank's
A) reserves and the deposits of its customers are both assets.
B) reserves and the deposits of its customers are both liabilities.
C) reserves are assets and the deposits of its customers are liabilities.
D) reserves are liabilities and the deposits of its customers are assets.

Question

Quizplus · Accepted Answer

Reserves refer to the funds that a bank holds in order to meet the demands of its customers to withdraw money. Therefore, reserves are assets. On the other hand, deposits are liabilities because they represent the money that the bank owes to its customers.

A Bank's