If John and Todd Both Have Chequing Accounts in the Same

Multiple Choice

If John and Todd both have chequing accounts in the same commercial bank and John writes a cheque for $5,000 payable to Todd,what will happen to the bank's accounts?

A) They will not be affected.
B) Assets and liabilities will both decrease by $5,000.
C) Liabilities will decrease by $1,000,and the bank's equity will increase by $5,000.
D) Reserves and demand deposits will both decrease by $5,000.
E) Demand deposits will increase by $5000 and loans to customers will decrease by $5,000.