State whether the following statement is true or false with reasons: Bank overdraft is an asset of the business. - Book Keeping and Accountancy

MCQ

True or False

State whether the following statement is true or false with reasons:

Bank overdraft is an asset of the business.

Options

True
False

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Solution

This statement is False.

The amount withdrawn by the Current Accountholder in excess of the balance in his Current Account up to a predetermined limit decided by the bank on the basis of security offered is called Bank Overdraft. It is a temporary loan given by the bank to the Current Accountholder. It is a liability of the business.

Concept: Accounting Concepts, Conventions and Principles

Is there an error in this question or solution?

Chapter 1: Introduction to Book - Keeping and Accountancy - Exercise Q.4 [Page 17]

Q 4 Q 3 Q 5

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