alleryA bank's balance sheet identity is
ANet Worth = Assets + Liabilities
BDeposits + Loans = Reserves
CAssets = Liabilities + Net Worth
DAssets = Liabilities (always exactly)
Answer & Solution
Correct answer: C. Assets = Liabilities + Net Worth
Standard accounting identity.
**For a bank:** Reserves + Loans = Deposits + Net Worth.
Net Worth absorbs any positive gap when assets exceed liabilities.
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