Bank Overdraft

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SACHIN (Querist)

16 May 2016 Respected Sir Can u tell me that what will be the accounting Treatment of Bank Overdraft as Journal Entry..?

shivaji prasad bhimavarapu

shivaji prasad bhimavarapu (Expert)

16 May 2016 Bank overdraft is an operating account. It is like a bank account but difference is if you have money in Bank account it is asset. If you draw money from OD, your liability increases. Coming to journal entry : 1. If you have issued a cheque of Rs.100000 to a party named "ABC" from your "X Bank" OD Account , entry shall be : ABC A/c Dr 100000- To X Bank OD A/c.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)

16 May 2016 OD account is your Liability Account. So when you withdrawal amount by given cheque then your OD account will increase credit balance and if you deposit cheque in account then it will debit you balance which means liability reduce.

Rupesh Jain

Rupesh Jain (Expert)

16 May 2016 OD LIMIT IS bank credit facility you are taken form bank. you are taking OD As bank a/c when you make any entry of deposit or issue the cheque from that a/c.

SACHIN

SACHIN (Querist)

18 May 2016 thanku So much to all Sir.

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