Bank Overdraft :

Bank overdraft is an amount drawn over and above the actual balance kept in the bank account. This facility is available only to the
current account holders. Interest will be charged for the amount overdrawn i.e., overdraft. The Cash book will show a credit balance i.e., unfavourable balance. The pass book will show a debit balance.

A summary of the transactions and the reconciliation procedure is given in the table below.