Asked by Grace Gould on Jul 17, 2024
Verified
A company maintains the asset account Cash on its books while the bank maintains a reciprocal account which is
A) a contra-asset account.
B) a liability account.
C) also an asset account.
D) an owner's equity account.
Asset Account
An account on a company’s balance sheet that represents a resource controlled by the company as a result of past events and from which future economic benefits are expected.
Liability Account
An accounting record of amounts owed by a business to creditors, typically categorized as current or long-term liabilities.
- Pinpoint the involved parties in dealings utilizing checks.
Verified Answer
MG
Melika golforoushJul 19, 2024
Final Answer :
B
Explanation :
The bank views the cash deposited by a company as a liability because it owes this amount back to the company. The bank's obligation to return the funds makes it a liability on the bank's books.
Learning Objectives
- Pinpoint the involved parties in dealings utilizing checks.