What does negative balance of bank statement tell us?



The bank account of our company gives the negative(-) balance at the end the month, so what does it tell.

What does negative balance of bank statement tell us?
Rate these answers

6 Replies to “What does negative balance of bank statement tell us?”





  1. Bank account can give a negative balance if the balance in your account is overdrawn below the zero mark. This ispossible in two circumstances.

    1) If your company’s bank account is a Cash Credit (CC) account or if the particular account has an Overdraft (OD) facility, then in such cases your balance will be negative if the cash credit or overdraft facility is being used. Thus if your account has an OD/CC facility of say Rs. 10,000, and after the balance in your account has become zero, if your company has utilised Rs. 4000 of this facility then the balance will be a negative of Rs. -4000/-

    2) In normal current accounts, the balance can be negative if your closing balance at the end of the month is not sufficient enough to cover up the bank’s services charges debited at the closing. For example if your company’s bank balance on the last day of the month is Rs. 300/- and if the bank debits services charges of Rs. 500/- on the last day (these service charges can be anything ranging from clearing charges, cash withdrawal charges, cash collection charges, out-station cheque clearing charges,etc)


  2. Bank account can give a negative balance if the balance in your account is overdrawn below the zero mark. This ispossible in two circumstances.

    1) If your company’s bank account is a Cash Credit (CC) account or if the particular account has an Overdraft (OD) facility, then in such cases your balance will be negative if the cash credit or overdraft facility is being used. Thus if your account has an OD/CC facility of say Rs. 10,000, and after the balance in your account has become zero, if your company has utilised Rs. 4000 of this facility then the balance will be a negative of Rs. -4000/-

    2) In normal current accounts, the balance can be negative if your closing balance at the end of the month is not sufficient enough to cover up the bank’s services charges debited at the closing. For example if your company’s bank balance on the last day of the month is Rs. 300/- and if the bank debits services charges of Rs. 500/- on the last day (these service charges can be anything ranging from clearing charges, cash withdrawal charges, cash collection charges, out-station cheque clearing charges,etc)





Leave a Reply

Your email address will not be published. Required fields are marked *