wht is difference btween cash credit and overdraft
?
diff between
abhishek bhatt (CA student) (136 Points)
19 January 2009
abhishek bhatt (CA student) (136 Points)
19 January 2009wht is difference btween cash credit and overdraft
?
Prakash Popat
(3134 Points)
Replied 19 January 2009
Prakash Popat
(3134 Points)
Replied 19 January 2009
Ahmed
(Accounts)
(77 Points)
Replied 19 January 2009
OD is temporary loan from bank which is increase ur current liabilities and cash credit means reduced in ur current assets
Varun Malhotra
(Chartered Accountant)
(207 Points)
Replied 19 January 2009
Major difference is due to the requirement of security/ collateral against loan. Cash credit is secured by hypothecation of existing current assets the company whereas bank OD is generally unsecured. Bank OD is extended to entities having good creditworthiness in the market.
srinivas
(humble devotee of saraswati)
(885 Points)
Replied 19 January 2009
VARUN SIR'S ANSWER CLEARLY POINTS OUT THE DIFFERENCE
CA SUDHIR HALAKHANDI
(PRACTICING CHARTERED ACCOUNTANT)
(13196 Points)
Replied 19 January 2009
Cash credits are agianst the hypotecation of stock and debtors and over draft may be secured or unsecured . The unsecured overdraft is the sanction to overdrawn the account without any security except the personal security and credit worthyness of the borrower. In case of secured overdraft , the borrowed money is secured against FDR, NSC etc.
- ca sudhir halakhandi
shailesh agarwal
(professional accountant)
(7642 Points)
Replied 20 January 2009
thanks for good clarification
abhishek bhatt
(CA student)
(136 Points)
Replied 20 January 2009
ok thanks for answering frnds but wht abt int and opening of a/c?like od cab be overdrawn and in case of cash credit wht is procedure?
CAclubindia
