Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 6 - No. 27)
If a business is overdrawn, is it in the business's interests to do so?
Yes, as it is an asset.
Yes, as it is a liability.
No, as it is an asset.
No, as it is a liability.
Explanation
Being overdrawn means the business owes the bank money, which is a liability, and it's generally not in the business's interests.
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