Question
Which of the following is true with respect to the
difference between a bank’s balance sheet and a manufacturing company’s balance sheet? A. There is no capital in case of bank’s balance sheet while it is a significant part of assets for manufacturing company B. The fixed assets in case of bank’s balance sheet are very small while they are the major item in case of manufacturing company C. Money raised through bonds is a liability for manufacturing company but an investment for bank.Solution
Capital is a part of all kinds of balance sheet. The fixed assets in case of bank’s balance sheet are very small while they are the major item in case of manufacturing company. In case of banks, the major asset is advances. Money raised through bonds is a debt and therefore a liability for any type of company.
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