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

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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The amount withdrawn by the Current Accountholder in excess of the balance in his Current Account up to a predetermined limit decided by the bank on the basis of security offered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
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Chapter 1: Introduction to Book - Keeping and Accountancy - Exercises [Page 17]

APPEARS IN

Balbharati Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board
Chapter 1 Introduction to Book - Keeping and Accountancy
Exercises | Q 4. 4) | Page 17
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