T-accounts : tracking assets and liabilities :: bank reserves : ?

T-accounts are a way to track financial transactions, showing how assets and liabilities change. In this comparison, just as T-accounts help us organize and understand the balance of what a company owns and owes, bank reserves are the funds that banks must keep available to meet customer withdrawals and other obligations. Bank reserves ensure that banks can provide money to depositors when needed, similar to how T-accounts help businesses keep track of their money. For example, if a bank has $1 million in deposits, it might keep $100,000 as reserves to ensure it can meet withdrawal demands. Therefore, the relationship can be understood as bank reserves being to banks what T-accounts are to businesses, both serving as essential tools for financial management.