When you use a bank, your money is:

• A. Recorded as an asset on your balance sheet only
• B. Not recorded in any accounting records
• C. Recorded as revenue for the bank
• D. Recorded as a liability on the bank's balance sheet

Answer: (D)

Verified step by step guidance

1. Understand the concept of a bank's balance sheet: A bank's balance sheet includes assets, liabilities, and equity. Liabilities represent obligations the bank owes to others, including customer deposits.
2. Recognize the nature of customer deposits: When you deposit money in a bank, the bank owes you that money. This creates a liability for the bank because it is obligated to return the funds upon request.
3. Clarify the accounting treatment: For the bank, your deposit is recorded as a liability on its balance sheet because it represents an obligation to you. For you, the deposit is recorded as an asset on your balance sheet because it is money you own and can access.
4. Eliminate incorrect options: The deposit is not recorded as revenue for the bank because it is not income earned; it is a liability. It is also not excluded from accounting records, as it is a key part of financial reporting.
5. Conclude with the correct answer: The money you deposit in a bank is recorded as a liability on the bank's balance sheet, reflecting the bank's obligation to return the funds to you.