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What is a bank overdraft?...

What is a bank overdraft?

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Bank draft could be a sort of money instrument that's provided to some customers by the bank within the style of Associate in Nursing extended credit facility, that comes into impact once the most balance of the account reaches zero.
In alternative words, bank draft is Associate in Nursing unsecured style of credit that's in the main used for covering short term money necessities.
Banks provide a credit limit to the bank customers supported their relationship with the bank.
The bank levies separate interest and charges towards non-maintenance of account. The charge per unit for the draft facility might vary from bank to bank.
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On 1st May 2016 , cash book bank overdraft balance was Rs. 2,000 . On depositing Rs 10,000 into bank and giving a cheque of Rs 7,200 for rent , the balance will be :

On checking the Bank Pass Book it was found that it showed an overdraft Rs. 5,220 as on 31st March, 2019 while as per Ledger it was different. The following differences were noted : (i) Cheques deposited but not yet credited by the bank Rs. 6,000 Cheques dishonoured and debited by the bank but not given effect ot it in the Ledger Rs. 800 (iii) Bank charges debited by the Debit Memo not received fro the bank Rs. 50 (iv) Interest on overdraft excess credited in the Ldger Rs. 200 (v) Wrongly credited by the bank to account , deposite of some other party Rs. 900 (vi) Cheques issued but not presented for payment Rs. 400

On 31st March, 2019, Cash Book of a merchant showed bank overdraft of Rs. 1,72,985. On comparing the Cash Book with Bank Statement, following discrepancies were noted. (i) Cheques issued for Rs. 60,000 were not presented in the bank till 7th April 2019 (ii) Cheques amounting to Rs.75,000 were not presented in the bank but were not collected (iii) A cheque of Rs. 15,000 received from Mahesh Chand and deposited in the bank was dishonoured but the non-payment advice was not received from the bank till 1st April, 2019. (iv) Rs. 1,50,000 being the proceeds of a bill receivable collected appared in the Pass Book but not in the Cash Book , (v) Bank charges Rs. 1,500 and intrest overdraft Rs. 8,500 appeared in the Pass Book but not in the Cash Book (vi) Overdraft b alance as per Cash Book of Rs. 500 pm 28thh Feburay, 2019 was wrongly carried forward as debit balance. The error was noted at the time of preparing the Bank Reconciliation Statement as on 31st March, 2019 Prepare Bank Reconciliation Statement

Prepare a Bank Reconciliation Statement as on 31st Dec., 2012 from the following transactions : (i) Bank overdraft as per Pass Book ₹22,000 as on 31st Dec. (ii) On 28th Dec., cheques had been issued for ₹50,000 of which cheques worth ₹6,000 only had been encashed upto 31st Dec. (iii) Cheques amounted to ₹4,500 had been paid into the bank for collection but out of these only ₹1,000 had been credited in the Pass Book. (iv) The bank has charged Rs. 1, 500 as interest on overdraft and the intimation of which has not been received as yet. (v) Bank has collected Rs. 1, 600 directly in respect of interest of interest on investment. (vi) A cheque of Rs. 1,200 has been debited in bank column of Cash Book, but it was not sent to bank at all.