Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 24 - No. 21)
Which of the following describes a situation where a bank account is overdrawn?
The business has more money in the bank than it owes.
The business has less money in the bank than it owes.
The business has a zero balance.
The bank has made an error.
Explanation
An overdrawn bank account means the business has spent more money than it had in the account and owes the bank.
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