With the help of an overdraft, an individual can continue to withdraw the money without even funds in the account.
• When payment is made to bank overdraft:
Bank overdraft A/c Dr
To cash (being money deposited )
• When Money is withdrawal from the bank:
Note: bank Overdraft is a liability for the firm.
Cash A/c Dr
To Bank Overdraft A/c
• When payment is made to the creditor
The bank overall is the facilities that are given to the special customers that have an account in a respective bank that gets an extension of the credits from the bank and then the account reached zero.
creditor A/c Dr
To bank overdraft A/c
(being payment is made to the creditor)
• When goods are purchased from a Bank Account:
Purchased A/c Dr
To Bank overdraft A/c
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