A company maintains the asset account, Cash in Bank, on its books, while the bank maintains a reciprocal account that is recorded, on the bank's books, as
A)a contra-asset account.
B)a liability account.
C)an asset account.
D)a shareholders' equity account.

Question

Quizplus · Accepted Answer

The bank's reciprocal account is a liability account because it represents the bank's obligation to provide cash to the company when requested.

A Company Maintains the Asset Account, Cash in Bank, on Its