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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

Which of the following is not true about a commercial Bank ?

Options:

Assets = Reserves + Loans

Net worth = Assets - Liabilities

Liabilities = Loans

Deposits = Assets - Net worth

Correct Answer:

Liabilities = Loans

Explanation:

The correct answer is option (3) : Liabilities = Loans

In accounting terms, the liabilities of a commercial bank include deposits, not loans. The correct relationship is that deposits are part of the liabilities, and loans are part of the assets on the balance sheet of a commercial bank.

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