The Table Given Below Shows the Assets and Liabilities of the National

question 25

Multiple Choice

The table given below shows the assets and liabilities of the National Bank. Assume that this is the only bank in the economy.
Table 13.2
$\begin{array}{c}\text { Balance Sheet of National Bank }\\\quad\quad\quad\text { Assets } \quad\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }\\\begin{array}{|c|c|c|c|}\hline\text { Vault Cash } & \$ 1,725 & \text { Deposits } & \$ 5,450 \\\text { Deposit in Fed } & \$ 425 & & \\\text { Loans } & \$ 3,300 & & \\\hline \text { Total Assets } & \$ 5,450 & \text { Total Liabilities } & \$ 5,450\\\hline\end{array}\end{array}$


-Refer to Table 13.2 and calculate the legal reserves of the bank.

• A) $425
• B) $5,450
• C) $1,725
• D) $2,150
• E) $1,500

---

Definitions:

Posting References

Indicators used in accounting to record the transfer of amounts from the journal to the ledger, facilitating the tracking of transactions through the accounting system.

Journal Entry

A record in accounting that documents a transaction in a company's ledger, thereby affecting at least two accounts to keep the accounting equation in balance.

Corning Company

A technology company known for its specialty glasses, ceramics, and related materials and technologies, including the development of Gorilla Glass.

Chart of Accounts

A systematic listing of all ledger account titles and numbers used by a company, showing the classification and arrangement of accounts.