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That's not confusing, it's just wrong. On my balance sheet, money I deposit is an asset: The bank owes me. On the bank's balance sheet, money I deposit is a l
by nulbyte 4y ago
That's not confusing, it's just wrong.
On my balance sheet, money I deposit is an asset: The bank owes me.
On the bank's balance sheet, money I deposit is a liability: The bank owes me.
- patmorgan23 4y agoYour deposit creates an equal asset and liability on the bank's balance sheet remember assets = liability + equity must balance.
- nulbyte 4y agoDeposits are liabilities to the bank's customers. The cash the bank has, regardless of how it got it, is an asset. The cash may result from a customer making a deposit, but its still just cash. Deposits and cash are separate items on the balance sheet. Here is an example from the Fed: https://www.federalreserve.gov/releases/h8/current/ https://www.federalreserve.gov/releases/h8/current/ Note that cash is a single line item. The banks could get that from other sources, such as loan repayments.