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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

In the context of a typical bank's balance sheet, which of the following correctly identifies the largest asset and the largest liability?

Largest asset: Loans; Largest liability: Deposits

Largest asset: Investments; Largest liability: Accounts payable

Largest asset: Cash; Largest liability: Bonds payable

Largest asset: Buildings; Largest liability: Shareholders' equity

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the structure of a typical bank's balance sheet. A balance sheet is divided into assets, liabilities, and equity. Assets represent what the bank owns or controls, liabilities represent what the bank owes, and equity represents the residual interest of shareholders.

Step 2: Identify the largest asset in a bank's balance sheet. Banks primarily generate income by lending money, so loans are typically the largest asset. Loans are recorded as assets because they represent amounts owed to the bank by borrowers.

Step 3: Identify the largest liability in a bank's balance sheet. Deposits are the largest liability because they represent money that customers have placed in the bank, which the bank is obligated to return upon request.

Step 4: Compare the options provided in the problem. The correct identification of the largest asset and liability should align with the typical structure of a bank's balance sheet: Largest asset: Loans; Largest liability: Deposits.

Step 5: Conclude that the correct answer is the option that lists 'Largest asset: Loans; Largest liability: Deposits,' as this reflects the standard financial structure of a bank.