The following is an excerpt from an article dealing with accounting and banks in The Wall Street

Question:

The following is an excerpt from an article dealing with accounting and banks in The Wall Street Journal, “GAO Says Accountants Auditing Thrifts Are Hiding Behind Outdated Standards” (February 6, 1989) p. C21. Congress deregulated the left side of the [liabilities] by permitting thrifts to get into high-risk business but kept regulation and deposit insurance for the right side of the [assets].
1. From an accounting perspective, what is wrong with this quote?
2. As a bank depositor, do you care about the of the bank where you deposit your money? Why or why not? How might your attitude change if the U.S. federal government were to abolish deposit insurance?
3. Consider your account at a bank—does the bank view your account as an asset or as a liability?

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...