Suppose a customer deposits $1,000 cash into her chequing account. How will this affect the bank’s...
Suppose a customer deposits $1,000 cash into her chequing account. How will this affect the bank’s assets and liabilities?
| a. |
Assets fall by $1,000 and liabilities fall by $1,000. |
|
| b. |
Assets fall by $1,000 and liabilities rise by $1,000. |
|
| c. |
Assets rise by $1,000 and liabilities fall by $1,000. |
|
| d. |
Assets rise by $1,000 and liabilities rise by $1,000. |
Homework Answers
ANSWER:
The correct answer is option d that is Assets rise by $1,000 and liabilities rise by $1,000 as when $1,000 is deposited ,reserves and checkable deposits (assets) increase by $1,000 and their liabilities will rise by $1,000 as they will have an obligation towards the customer to bay back $1,000.
Add Answer to:
Suppose a customer deposits $1,000 cash into her chequing
account. How will this affect the bank’s...
Stacy deposits $1,000 in her checking account. The bank ends up loaning $400 from the $1,000...
Stacy deposits $1,000 in her checking account. The bank ends up loaning $400 from the $1,000 to another customer, and placing $600 in the bank’s vault. Thus, as a result of Stacey’s deposit and the bank’s actions, the money supply has Select one: a. Declined by $400. b. Declined by $200. c. Increased by $400. d. Increased by $200.
Suppose that a lottery winner deposits $20 million in cash into her transactions account at the...
Suppose that a lottery winner deposits $20 million in cash into her transactions account at the Bank of America. Assume a reserve requirement of 30 percent and no excess reserves in the banking system prior to this deposit. Show the changes on the Bank of America balance sheet when the $20 million is initially deposited. BANK OF AMERICA Assets Liabilities Change in required reserves ? million Change in Deposits ? million Change in excess reserves ? million Change in total...
a) A customer deposits $10,000 check into her checking account. Use a T-account to show how...
a) A customer deposits $10,000 check into her checking account. Use a T-account to show how her bank will reflect this transaction. b) Using a T-account, show how the bank will reflect the transaction once the funds become available. c) Assuming the bank has a 10% required reserve requirement, show on a T-account the required and excess reserves. d) Assume that this bank decides to make a car loan using the excess reserves from our customer's deposit. Show this transaction...
Questions 28-30 First Bank Cash on hand= $300 Customer deposits = $3,000 Deposits at the Bank...
Questions 28-30 First Bank Cash on hand= $300 Customer deposits = $3,000 Deposits at the Bank of Canada = $200 Cash on hand = $300 Desired reserve coefficient = 10% First Bank’s total reserves are a) $110; b) $200; c) $300; d) $500 What is the maximum dollar value of new loans that First Bank should grant? a) $0; b) $200; c) $400; d) $500 If First Bank was a monopoly bank (it had no competitors in the region and...
Please fill out the "Your turn!": John withdraws $99 and Eva uses her deposits to repay...
Please fill out the "Your turn!": John withdraws $99 and Eva uses her deposits to repay her loan and upload a picture / pdf. Please not that you should add numbers for all 8 balance sheet positions for Bank A and Bank C. . John withdraws $99 from his account at bank A Bank A Bank A after withdrawal Assets Liabilities Assets Liabilities Cash 30Y Loans $100 Deposits $500 Equity $599 $1 Cash 30Y Loans Deposits Equity • Eva uses...
Jane deposits $1,000 into her savings account. During the first year, the account pays 6% but...
Jane deposits $1,000 into her savings account. During the first year, the account pays 6% but then the interest rate is cut to 4% for the second year. How much does Jane in her account have after two years?
4. Performed services for a customer and billed customer for services rendered $1,000 A. Assets Increase;...
4. Performed services for a customer and billed customer for services rendered $1,000 A. Assets Increase; Assets Decrease B. Liabilities Increase; Equity Decreases C. Assets Increase; Liabilities Increase D. Assets Decrease; Equity Decreases E. None of the above 5.Collected cash from customer billed in transaction (4) directly above A. Assets Increase; Liabilities Increase B. Assets Increase; Equity Increases C. Assets Increase; Assets Decrease D. Liabilities Increase; Equity Decreases E. None of the above 6. Received $2,000 cash from customers for...
Use T-account analysis to answer the following questions: a) You just deposited $100 of cash to...
Use T-account analysis to answer the following questions: a) You just deposited $100 of cash to your chequing account at TD bank. Use the T- account to record the change of TD bank’s balance sheet. Also write down the T- account for yourself. b) Suppose TD bank has a desired reserve ratio of 10%. To maximize profit, how much of loans can TD bank make at most? Use the T-account to record the change of balance sheet of TD bank...
Mighty Bank • Customer deposits = $5,000 • Deposits at the Bank of Canada = $300...
Mighty Bank • Customer deposits = $5,000 • Deposits at the Bank of Canada = $300 • Cash on hand = $400 • Desired reserve coefficient = 10% 23. Mighty Bank’s excess reserves are a) $200 b) $250 c) $300 d) $400 24. What is the maximum dollar value of new loans that Mighty Bank should grant? a) $0 b) $200 c) $700 d) $5,000 25. If Mighty Bank was a monopoly bank (it had no competitors in the region...
Indicate how the following transactions affect the accounting equation. a. The purchase of supplies on account....
Indicate how the following transactions affect the accounting equation. a. The purchase of supplies on account. Assets decrease; stockholders' equity decreases b. The purchase of supplies for cash. Assets decrease; stockholders' equity decreases Payment of cash dividends to stockholders. Assets increase; liabilities increase d. Revenues received in cash. Assets increase; stockholders' equity increases Sale made on account. No effect e.
a) A customer deposits $10,000 check into her checking account. Use a T-account to show how her bank will reflect this transaction. b) Using a T-account, show how the bank will reflect the transaction once the funds become available. c) Assuming the bank has a 10% required reserve requirement, show on a T-account the required and excess reserves. d) Assume that this bank decides to make a car loan using the excess reserves from our customer's deposit. Show this transaction...
Please fill out the "Your turn!": John withdraws $99 and Eva uses her deposits to repay her loan and upload a picture / pdf. Please not that you should add numbers for all 8 balance sheet positions for Bank A and Bank C. . John withdraws $99 from his account at bank A Bank A Bank A after withdrawal Assets Liabilities Assets Liabilities Cash 30Y Loans $100 Deposits $500 Equity $599 $1 Cash 30Y Loans Deposits Equity • Eva uses...
4. Performed services for a customer and billed customer for services rendered $1,000 A. Assets Increase; Assets Decrease B. Liabilities Increase; Equity Decreases C. Assets Increase; Liabilities Increase D. Assets Decrease; Equity Decreases E. None of the above 5.Collected cash from customer billed in transaction (4) directly above A. Assets Increase; Liabilities Increase B. Assets Increase; Equity Increases C. Assets Increase; Assets Decrease D. Liabilities Increase; Equity Decreases E. None of the above 6. Received $2,000 cash from customers for...
Indicate how the following transactions affect the accounting equation. a. The purchase of supplies on account. Assets decrease; stockholders' equity decreases b. The purchase of supplies for cash. Assets decrease; stockholders' equity decreases Payment of cash dividends to stockholders. Assets increase; liabilities increase d. Revenues received in cash. Assets increase; stockholders' equity increases Sale made on account. No effect e.
Most questions answered within 3 hours.
-
MATLAB HW 11 problem using Switch Case and Input commands
Write a script file that calculates...
asked 4 minutes ago -
A college student is employed as a door-to-door newspaper
salesman. Historical data suggests that the student...
asked 19 minutes ago -
Considering gravitational time dilation, calculate the time that
passes in Earth’s surface while 1 hour passes...
asked 43 minutes ago -
Minitab Problem: Take the Lake Hume June rainfall data and find
use the processes outlined in...
asked 1 hour ago -
X Company is trying to decide whether to continue using old
equipment to make Product A...
asked 1 hour ago -
IN PYTHON ONLY !! Program 2: Re-work
program #5 (WeeklyHours) from the previous assignment such that...
asked 2 hours ago -
The average length of time between arrivals at a turnpike
toll-booth is 26 seconds. What is...
asked 3 hours ago -
(a) A piston at 6.1 atm contains a gas that occupies a volume of
3.5 L....
asked 5 hours ago -
Please answer true or false. Words
cannot be changed or added in to make it true...
asked 5 hours ago -
An empty test tube weighs 15.923 grams. Then,
MgCl2•6H2O is added into the test tube. After...
asked 5 hours ago -
Assume memory access is 10 units of time and disk access is
10000 units of time....
asked 5 hours ago -
1. Are all good samples random?
2. Magazines often report surveys giving statistics such as “63%...
asked 5 hours ago