A Bank Balance Sheet Consists of Only the Following Items

question 13

Multiple Choice

A bank balance sheet consists of only the following items: $$\begin{array} { l l } \text { Deposits } & \$ 1,000 \\\text { Reserves } & \$ 100 \\\text { Securities } & \$ 400 \\\text { Debt } & \$ 500 \\\text { Loans } & \$ 2,000\end{array}$$ What is the value of bank capital?

• A) -$1,000
• B) +$500
• C) +$1,000
• D) +$1,500

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Definitions:

Generally Accepted Accounting Principles

A set of accounting rules and standards used in the preparation of financial statements to ensure consistency and comparability.

Double-entry System

An accounting technique which records each transaction as both a credit and a debit in different accounts, ensuring the accounting equation remains balanced.

Logical Method

A reasoned, systematic approach to solving problems or making decisions, often based on a sequence of steps or a set of established principles.

Recording Transactions

The process of documenting financial transactions in the company's accounting records, ensuring accurate financial reporting and analysis.