Need Help with bank overdrafts

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi, Iam doing the FRA exam in June and would appreciate any help.<BR>Q: When preparing the final account for the sole trader are bank overdrafts, part of the current assets or current liabilities section in the balance sheet. and why?<BR><BR>thanks for your help<BR><BR>SM<BR><BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Need Help with bank overdrafts

    Hi. Bank overdrafts are current liabilities, as it is money you owe out. As opposed to money in the bank, which is a current asset.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Need Help with bank overdrafts

    It is a current liability because overdraft facilities are only for short periods

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