Question

A bank's remaining value after it has met all its liabilities is known as

		a bank's liabilities.
		bank capital.
		a bank's income.
		a bank's assets.

Answer 1

The following points will help in determining the correct option :-

• We know under a Banks Balance sheet it's assets, liabilities along with its capital are shown.
• Where Assets represents the total resource the Bank has to put into use.
• Liabilities are the sources from where the money has been acquired and hence must be paid as it is a claim on the assets.
• Banks Capital is the leftover part once all assets have been used and the liabilities have been paid off.
• Banks income is the profit it derives from using the liabilities to finance assets such as loans and hence earn interest in return.

So in simple terms, Bank Assets - Bank Liabilities = Banks Capital

So, The remaining part of Bank once it has met all its liabilities is represented by the Bank's Capital.

Hence, Option B. Bank Capital is correct