Question

The agency function of discounting bills of exchange on behalf of customers impacts the bank’s balance sheet by:

• A. Increasing cash reserves only
• B. Increasing both assets (bills receivable) and liabilities (customer deposits)
• C. Increasing assets (loans and advances) and decreasing cash
• D. Increasing assets (bills receivable) and liabilities (borrowings)

Answer 1

Answer:

D. Increasing assets (bills receivable) and liabilities (borrowings)

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