Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Which of the following would be included as a liability on a commercial bank’s balance sheet?

Loans made to customers

Investment securities held for trading

Customer deposits

Bank-owned buildings

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Verified step by step guidance

Step 1: Understand the concept of liabilities on a balance sheet. Liabilities represent obligations that a company or entity owes to others, typically arising from past transactions or events. For a commercial bank, liabilities often include amounts owed to customers or other entities.

Step 2: Analyze each option provided in the problem to determine whether it qualifies as a liability. For example, loans made to customers are assets because they represent amounts owed to the bank by borrowers. Investment securities held for trading are also assets, as they are owned by the bank and can generate income.

Step 3: Focus on customer deposits. These are amounts deposited by customers into the bank, which the bank is obligated to repay upon request or at maturity. Since these represent obligations, they are classified as liabilities on the bank’s balance sheet.

Step 4: Consider bank-owned buildings. These are physical assets owned by the bank and used for operations, such as branches or offices. They are not liabilities because they do not represent obligations owed to others.

Step 5: Conclude that customer deposits are the correct answer, as they meet the definition of liabilities and are included on a commercial bank’s balance sheet under the liabilities section.