Alfie Has Been Given a Loan for $10,000,and He Deposited

question 140

Multiple Choice

Alfie has been given a loan for $10,000,and he deposited the full loan amount into his checking account.How would this be reflected on his bank's balance sheet?

• A) Loans would increase by $10,000,but deposits would decrease by less than $10,000.
• B) Loans would be unaffected,but deposits would increase by $10,000.
• C) Loans and deposits would be unaffected.
• D) Loans would decrease and deposits would increase by the same amount as the deposit.
• E) Loans and deposits would increase by the same amount as the deposit.

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Definitions:

Temporary Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and withdrawal accounts, used to track transactions for a particular period.