Bank overdrafts, if material, should be:a. reported as a current liability.b. reported as a deduction from the current asset section.c. reported as a deduction from cash.d. netted against cash and a net cash amount reported.

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Answer:

The correct answer is a. reported as a current liability.

Explanation:

The bank overdraft refers to payments or disbursements made by the bank that exceed the balance of the account of the account holder.

When a company opens a checking account with a certain value, it can write checks for a value that is equal to or lower than the one in the account balance, but in some cases the bank authorizes to write checks for a value greater than the balance in the account. checking account and that is when the bank overdraft occurs.

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