Answer: Option A
Answer: (a)
Overdrafts are an extension of credit from a lending institution when an account reaches zero.
An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically, the bank allows people to borrow a set amount of money.
An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero.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.”