State the following statement is True or False:
The facility given by the bank to draw money over and above the actual account balance is called overdraft.

True

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False

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Solution

The correct option is A True
Overdraft facility allows to withdraw cash or to issue cheques for the amount over and above the account balance. Usually overdraft facility is provided to current account-holders. It is a short term credit facility and carries an interest on the amount overdrawn, to be paid to the bank.

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Similar questions

State whether the following Statements are True or False.

1) Bank Reconciliation Statement is prepared by Bank.
2) Bank Reconciliation Statement is prepared at the end of stipulated period.
3) Overdraft facility is allowed to proprietors personal account
4) Debit balance of Pass Book represents overdraft
5) Credit balance of Bank column of Cash Book represents the balance as per Cash book.
6) Bank charges debited by Bank increases bank balance in the Pass Book.
7) Interest credited in Pass Book is an income to the Customer.
8) Bank Reconciliation Statement is prepared to detect the errors the takes place in accounting

Q. State whether the following statement is True or False.
Bank overdraft means debit balance of a customer's account with the bank.

Q. State whether the following statements are True or False.

On dissolution Bank Overdraft is transferred to Realisation Account.

Q. The account on which overdraft facility is allowed by bank is called a ___________.

Give on Word/Term or phrase which can substitute each of the following statements.

1) Statement showing the causes of disagreement between the balance of Cash Book and Pass Book
2) The account on which overdraft facility is allowed by Bank.
3) Excess of total of debit side over total of credit side of Cash Book Bank column.
4) An unfavorable balance shown by the Pass Book
5) A copy of customer’s account issued by the Bank
6) Booklet or a Statement which is used to record the banking transactions.
7) Credit balance of Bank Column of the Cash Book
8) Refusal by Bank to make the payment of cheque

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State the following statement is True or False:The facility given by the bank to draw money over and above the actual account balance is called overdraft.

State the following statement is True or False:
The facility given by the bank to draw money over and above the actual account balance is called overdraft.