If Jan and Tina both have chequing accounts in the same commercial bank and Jan writes a cheque for $5,000 payable to Tina, what will happen to the bank's accounts?
Question 6 options:
They will not be affected.
Assets and liabilities will both decrease by $5,000.
Liabilities will decrease by $1,000, and the bank's equity will increase by $5,000.
Reserves and demand deposits will both decrease by $5,000.
Demand deposits will increase by $5000 and loans to customers will decrease by $5,000.