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i just saw a question with 2 types of bank account balance in TB
Bank deposit account Dr
Bank current account Crthis is the partnership account topic, which contains current account in capital.
But why are there bank current account too? Is it bank overdraft since its on Cr side? But there are bank deposit on Dr which is kinda weird when u have a bank overdraftPartnership accounts are not examinable in Paper FA (they were removed from the syllabus a very long time ago).
There can be more than one bank account. A debit balance means an asset, a credit balance means an overdraft.
ah okay
but how?
how can a bank be overdraft and still remain some money in there?
doesnt overdraft already mean the bank has 0 money and you lend some money from bank, thus overdraft?You can have more than one account – either with the same bank or with different banks.
It is common for deposit accounts to be for a fixed period and for a penalty to be charged if the money is taken out early. So if you need some money for a short period it might be better to take an overdraft and pay a bit of interest rather than close the deposit and pay a penalty.
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