Question

Assertion (A): Bharat issues a cheque of ₹ 2,00,000 to his creditor, Swadesh, whereas his available balance in Current Account is only ₹ 1,00,000.

Reason (R): The customer who maintains a current account with the bank takes permission from the bank to withdraw more money than deposited in his account. This facility is called as Bank Overdraft.

Options

• Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is True but Reason (R) is False.

• Assertion (A) is False but Reason (R) is True.

Answer 1

Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).

Explanation:

Bharat issued a cheque for ₹ 2,00,000 while his current account has only ₹ 1,00,000. This act reflects an overdrawing of funds. The reason provided explains the concept of a Bank Overdraft, which is a facility that allows a current account holder to withdraw more money than is available in the account. Thus, both the assertion and reason are correct, and the reason correctly explains the assertion.