Question on: JAMB Commerce - 2018
Bank overdraft as a short term source of fund is
A
A current liability
B
An overdrawn account
C
Grade to a newly opened account
D
Repayable after more than a year
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Correct Option: A
An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn
Current liabilities are a company's debts or obligations that are due within one year or within a normal operating cycle, example is overdraft
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