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Dec 16, 2023
A bank overdraft is not considered a current asset. It is actually a liability.
An overdraft occurs when a bank account holder withdraws more money from their account than what is available. In such cases, the bank allows the account holder to continue withdrawing funds, resulting in a negative balance. This negative balance is essentially a loan from the bank to the account holder, and therefore it is classified as a liability.
An overdraft occurs when a bank account holder withdraws more money from their account than what is available. In such cases, the bank allows the account holder to continue withdrawing funds, resulting in a negative balance. This negative balance is essentially a loan from the bank to the account holder, and therefore it is classified as a liability.
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