In the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts, which are recorded under current liabilities on the balance sheet. Under US GAAP overdrafts and revolvers are always treated as a liability and therefore never included in the cash and cash equivalents number.

Where do we record bank overdraft?

Generally, the bank overdraft in the balance sheet will be reported as a bank overdraft double entry. This would entail listing it as an increase in cash flow — an increase as a bank overdraft asset — while also being reported on the other side of the general ledger as an increase in short-term liabilities.

How do you record overdraft in accounting?

Cash Overdraft in Balance Sheet In the balance sheet, show the negative cash balance as Cash Overdraft in the current liabilities. Or you can also include the amount in accounts payable. If you are netting the three bank accounts, consider using the Cash Overdraft option.