Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 17 - No. 48)
What is the effect of a bank overdraft on the bank statement?
The bank statement will show a credit balance.
The bank statement will show a debit balance.
The bank statement will show a zero balance.
The bank statement will not reflect a bank overdraft.
Explanation
A bank overdraft occurs when a business withdraws more money than it has in its bank account, resulting in a negative balance, which is a credit balance from the bank's perspective.
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