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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Definitions:

Regulation

Rules or directives made and maintained by an authority to control or govern conduct.

Published Decision

An official decision of a court that is recorded and made available to the public, often setting a precedent.

Binding Precedent

A previous legal decision or judgment that must be followed by courts in future cases of a similar nature within the same jurisdiction.

Commercial Database

A structured collection of data or information, often used by businesses, that is maintained to provide support for decision-making or research.