How is an overdraft shown on balance sheet?

How is an overdraft shown on balance sheet?

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Hi

I am a bit confused.  Company has a total overdraft facility of £10k and as at balance sheet date is £2k overdrawn.  There is just one company bank account, no petty cash.  

How is this reflected in the balance sheet?  Should it be either:

a)
Current Assets
Cash at bank and in hand = £nil

Creditors
Overdraft = £2k

or,

b)
Current Assets
Cash at bank and in hand = £8k

Creditors
Overdraft = £10k

Both give same net balance.

Guidance appreciated.

Many thanks

Replies (4)

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By The Innkeeper
11th Sep 2012 20:44

hmm

do I sniff homework

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Replying to paulb:
Quack
By Constantly Confused
12th Sep 2012 09:15

If you do

The Innkeeper wrote:

do I sniff homework

If you do, play nice and help the chap out!  We all had to learn somewhere.

Thanks (1)
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By tonycourt
11th Sep 2012 21:01

Here's a clue

The overdraft facility has no place on a balance sheet

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By hkfinancials
12th Sep 2012 10:34

Option A it is.

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