reguarding bank overdraft

reguarding bank overdraft

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can bank overdraft be treated as cash at bank for account balance/ trial balance?
Jian He Ong

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By Richard Willis
14th Nov 2008 10:50

Not entirely sure what you mean but......
Hi He Ong (I hope that I got this right!)

If the entity holds funds in other accounts with the SAME bank and the existence of an overdraft in the current account is purely a matter of timing or choice, then it is perfectly ok to net off all the accounts as cash in hand.

If the overdraft is in a DIFFERENT bank from the deposit accounts then the bank holding the current account may expect, depending on the reporting requirements of the business, to see this reflected in creditors in bank loans and overdrafts, with the deposits shown gross in cash in hand.

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