Question

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

• A. True
• B. False

Answer 1

The correct option is A True

True. Overdraft balance means debit balance of the customer's account with the bank which is the pass book. Pass book is prepared by the bank. Overdraft balance means we owe money to the bank. So, we become debtor (asset) for the bank. In such a case, bank shows debit balance in our pass book as pass book is prepared from the point of view of the bank in the books of bank.