PRC-3 · Chapter 4 · Question 47 of 65
A business faces a sudden cash shortage and arranges with its bank to withdraw Rs. 200,000 more than what is currently in its checking account to pay salaries. This short-term borrowing is called:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Bank overdraft
Explanation
A bank overdraft is a facility that allows an account holder to continue withdrawing money even when the account balance drops below zero, up to an agreed limit.
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