Suppose accountants at Mid-Size National Bank (Table 1) discover that theyve made an error: Cash in vault

Question:

Suppose accountants at Mid-Size National Bank (Table 1) discover that they’ve made an error: Cash in vault is only $8 million, not $10 million.
a. Which other entries in the bank’s balance sheet will change as a consequence of discovering this error?
b. If the required reserve ratio is 0.10, does this bank now have excess reserves or deficient reserves? Of what value?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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