Commercial Bank Quiz

Which of the following statements are true?

• A bankʹs assets are its sources of funds.

• A bankʹs liabilities are its uses of funds.

• A bankʹs balance sheet shows that total assets equal total liabilities plus equity capital.

• A bankʹs balance sheet indicates whether or not the bank is profitable.

Which of the following statements is false?

• A bankʹs assets are its uses of funds.

• A bank issues liabilities to acquire funds.

• The bankʹs assets provide the bank with income.

• Bank capital is recorded as an asset on the bank balance sheet.

Which of the following are reported as liabilities on a bankʹs balance sheet?

• Reserves

• Checkable deposits

• Loans

• Deposits with other banks

Which of the following are reported as liabilities on a bankʹs balance sheet?

• Discount loans

• Reserves

• U.S. Treasury securities

• Loans

Which of the following statements is false?

• Checkable deposits are usually the lowest cost source of bank funds.

• Checkable deposits are the primary source of bank funds.

• Checkable deposits are payable on demand.

• Checkable deposits include NOW accounts

Which of the following statements are true?

• Checkable deposits are payable on demand.

• Checkable deposits do not include NOW accounts.

• Checkable deposits are the primary source of bank funds.

• Demand deposits are checkable deposits that pay interest

Bank capital is equal to ________ minus ________.

• total assets; total liabilities

• total liabilities; total assets

• total assets; total reserves

• total liabilities; total borrowings

Bank capital is listed on the ________ side of the bankʹs balance sheet because it represents a ________ of funds.

• liability; use

• liability; source

• asset; use

• asset; source

Bank reserves include

• deposits at the Fed and short-term treasury securities.

• vault cash and short-term Treasury securities.

• vault cash and deposits at the central bank.

• deposits at other banks and deposits at the central bank.

The fraction of checkable deposits that banks are required by regulation to hold are

• excess reserves.

• required reserves.

• vault cash.

• total reserves.