When a $10 check written on the First National Bank is deposited in an account at the Second National Bank,then

Question

Quizplus · Accepted Answer

When a $10 check written on the First National Bank is deposited in an account at the Second National Bank, the liabilities of the First National Bank decrease because it owes $10 less to the check writer, and the liabilities of the Second National Bank increase because it owes $10 more to the depositor. However, the reserves of the First National Bank do not increase because it has already paid the $10 to the Second National Bank through the check clearing process. Therefore, only choices A and B are correct.

When a $10 Check Written on the First National Bank