Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 42 - No. 24)
What does a bank overdraft mean?
The company has more money in the bank than it owes.
The bank owes the company money.
The company has spent more money than it has in its account.
The bank made a mistake.
Explanation
A bank overdraft means the account has a negative balance because the company has withdrawn more than it had available.
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