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Which balance sheet perspective explains why deposits are liabilities for banks?

hard Q10 of 15
Banking Awareness - Basics Of Banking & Banking Terminology
Which balance sheet perspective explains why deposits are liabilities for banks?
AThey increase bank income
BThey represent customer ownership
CThey reduce bank assets
DThey are invested by the bank
Step-by-Step Solution

  1. Step 1: Identify ownership

    Deposited money belongs to customers.

  2. Step 2: Apply liability logic

    Banks hold deposits on behalf of customers.

  3. Final Answer:

    They represent customer ownership → Option B

  4. Quick Check:

    Customer-owned funds = bank liability ✅
Quick Trick: Customer-owned money = liability for bank.
Common Mistakes:
  • Assuming deposits belong to banks.
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