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A T-account represents ____.
A) a simplified balance sheet
B) asset transformation
C) T-bills
D) term deposits
Answer: A
Diff: 1 Type: MC Page Ref: 297
Skill: Recall
Objective List: 13.1 Outline a bank's sources and uses of funds
When a new depositor opens a chequing account at the First National Bank, the bank's assets
____ and its liabilities ____.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Answer: A
Diff: 1 Type: MC Page Ref: 298
Skill: Applied
Objective List: 13.2 Specify how banks make profits by accepting deposits and making loans
When Jane Brown writes a $100 cheque to her nephew (who lives in another province), Ms.
Brown's bank ____ assets of $100 and ____ liabilities of $100.
A) gains; gains
B) gains; loses
C) loses; gains
D) loses; loses
Answer: D
Diff: 1 Type: MC Page Ref: 299
Skill: Applied
Objective List: 13.2 Specify how banks make profits by accepting deposits and making loans
When you deposit a $50 bill in the New National Bank, ____.
A) its liabilities decrease by $50
B) its assets increase by $50
C) its reserves decrease by $50
D) its cash items in the process of collection increase by $50
Answer: B
Diff: 1 Type: MC Page Ref: 298 - 299
Skill: Applied
Objective List: 13.2 Specify how banks make profits by accepting deposits and making loans