Final answer:
Assets and liabilities should be reported in a balance sheet or T-account in a two-column format.
Step-by-step explanation:
Assets and liabilities of activities for which the government is acting in either a custodial or trustee capacity for individuals, organizations, or other governments should be reported in a balance sheet with a two-column format, known as a T-account. The T-account has a vertical line down the middle separating the assets, on the left, from the liabilities, on the right. Assets represent what the government holds, such as reserves, loans made, or government securities. Liabilities represent what the government owes to others, such as deposits made by individuals or organizations. By including net worth (total assets minus total liabilities) on the liabilities side, the T-account balance is zero.