Concept:A bank overdraft is a short-term borrowing facility, so it is classified as a current liability.
Explanation:An overdraft arises when a customer withdraws more money than the balance available in the bank account.
The account then falls below zero and is described as being "overdrawn."
Because the bank can demand repayment on short notice, the overdraft is repayable within a short period.
Current liabilities are debts or obligations that must be settled within one year or within the normal operating cycle of a business.
Common examples of current liabilities include trade creditors, accrued expenses, and bank overdrafts.
Option B merely describes the state of the account, not its financial classification.
Option D is incorrect because an overdraft is repayable in the short term, not after more than a year.
Answer:A. A current liability