Classify the following transaction as affecting either assets, or liabilities, o
ID: 1158926 • Letter: C
Question
Classify the following transaction as affecting either assets, or liabilities, or neither for each of the players" in the money supply process -the Bank of Canada (B0C) banks, and depositors You use your debit card to purchase a meal at a restaurant for $100. O A. Banks: Assets and iabilities increase. BOC Assets and liabilities increase ? B. Depositors Assets rise and liabilities rise Banks. Assets rise, but this is offset by a decrease in reserve assets ? ?, Depositors Assets nse and are offset by a fall in assets due to lovver chequing account balances Banks Reserve assets decrease and chequable deposit liabilities decrease D. Depositors Assets are unaffected Banks Assets increase and liabilities increase BOC Liabilities are unaffectedExplanation / Answer
An asset is anything that can be sold for value. A liability is an obligation that must be paid . The answer is(c) depositor's asset rises which is offset by a fall in assets to lower chequing account balances. The banks reserves assets decrease and chequable deposits liabilities decreases.