Suppose That a New Customer Opens a Checking Account and a Saving

question 193

Multiple Choice

Suppose that a new customer opens a checking account and a saving account, placing $50,000 in each. Later, the bank makes a loan of $100,000 to a business firm. For this bank

• A)assets increased by $50,000 because the saving account is an asset, while liabilities increased by $50,000 because the checking account is a liability.
• B)assets increased by $100,000 because the checking and saving accounts are assets, and liabilities increased by $100,000 because the loan is a liability.
• C)assets increased by $100,000 because the loan is an asset, and liabilities increased by $100,000 because the checking and saving accounts are liabilities.
• D)assets remained unchanged but liabilities increased by $100,000 because of the loan.

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