Overdraft Protection

Posted by ME on February 16, 2009, 6:13 pm

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How do i set up bank account with overdraft protection.
i have a 10000$ overdraft protection on my account and am always into it, do
i have to note the overdraft or do i just show the acct in red, which it
actually is. dep. this amount from a OCL acct will leave my bank in the
black

any info
tia

starting from scratch, bank accout + overdraft protection up to 10000$
how do i set up the account.

Posted by Laura on February 16, 2009, 7:41 pm

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> How do i set up bank account with overdraft protection.

> i have a 10000$ overdraft protection on my account and am always into it,

> do i have to note the overdraft or do i just show the acct in red, which

> it actually is. dep. this amount from a OCL acct will leave my bank in

> the black

> any info

> tia

> starting from scratch, bank accout + overdraft protection up to 10000$

> how do i set up the account.

Set up both the checking account and the overdraft account as bank accounts.
The easiest way to record the traffic flow between the 2 accounts would be
to use the bank transfer function. Record any overdraft fees incurred as
bank charges or to an Overdraft Fee expense account if you want to track
those expenses separate from normal bank charges. Don't forget to reconcile
each account each month.

Posted by Scott on February 16, 2009, 8:10 pm

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>> How do i set up bank account with overdraft protection.

>> i have a 10000$ overdraft protection on my account and am always into it,

>> do i have to note the overdraft or do i just show the acct in red, which

>> it actually is. dep. this amount from a OCL acct will leave my bank in

>> the black

>> any info

>> tia

>> starting from scratch, bank accout + overdraft protection up to 10000$

>> how do i set up the account.

> Set up both the checking account and the overdraft account as bank

> accounts. The easiest way to record the traffic flow between the 2

> accounts would be to use the bank transfer function. Record any overdraft

> fees incurred as bank charges or to an Overdraft Fee expense account if

> you want to track those expenses separate from normal bank charges. Don't

> forget to reconcile each account each month.

If the overdraft is a separate account I agree with Laura.

However, it sounds to me like the bank will simply cover any overdraft up to
$10000 negative balance, with no money actually transferring between
accounts. If that is so, I'd just leave the balance as negative - it's
technically a loan from the bank but since the outstanding balance is the
overdraft amount, it's easier this way. Any financial statements should show
it as a Liability.

Posted by Laura on February 16, 2009, 8:30 pm

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>>> How do i set up bank account with overdraft protection.

>>> i have a 10000$ overdraft protection on my account and am always into

>>> it, do i have to note the overdraft or do i just show the acct in red,

>>> which it actually is. dep. this amount from a OCL acct will leave my

>>> bank in the black

>>>

>>> any info

>>> tia

>>>

>>> starting from scratch, bank accout + overdraft protection up to 10000$

>>> how do i set up the account.

>> Set up both the checking account and the overdraft account as bank

>> accounts. The easiest way to record the traffic flow between the 2

>> accounts would be to use the bank transfer function. Record any overdraft

>> fees incurred as bank charges or to an Overdraft Fee expense account if

>> you want to track those expenses separate from normal bank charges. Don't

>> forget to reconcile each account each month.

> If the overdraft is a separate account I agree with Laura.

> However, it sounds to me like the bank will simply cover any overdraft up

> to $10000 negative balance, with no money actually transferring between

> accounts. If that is so, I'd just leave the balance as negative - it's

> technically a loan from the bank but since the outstanding balance is the

> overdraft amount, it's easier this way. Any financial statements should

> show it as a Liability.

Correct. It depends on how the bank sets up the account(s). I've seen ODP
setup as separate bank - savings like account as well as Line of credit
liability accounts. Just mimic the way the bank handles the transactions
otherwise you won't be able to reconcile the account(s).

Posted by ME on February 17, 2009, 7:13 am

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Scott is right...there has been no transfer of money and i only have one
acct. the bank just covers a neg amt up to 10000$ my statements show my
account $xx as a negative, so therefore i should just leave the acct as is
and just record it in the red? only one acct and nothing showing bank
indebtness? my balance statement should show bank = neg right?

thanks

>>>> How do i set up bank account with overdraft protection.

>>>> i have a 10000$ overdraft protection on my account and am always into

>>>> it, do i have to note the overdraft or do i just show the acct in red,

>>>> which it actually is. dep. this amount from a OCL acct will leave my

>>>> bank in the black

>>>>

>>>> any info

>>>> tia

>>>>

>>>> starting from scratch, bank accout + overdraft protection up to 10000$

>>>> how do i set up the account.

>>>

>>> Set up both the checking account and the overdraft account as bank

>>> accounts. The easiest way to record the traffic flow between the 2

>>> accounts would be to use the bank transfer function. Record any

>>> overdraft fees incurred as bank charges or to an Overdraft Fee expense

>>> account if you want to track those expenses separate from normal bank

>>> charges. Don't forget to reconcile each account each month.

>> If the overdraft is a separate account I agree with Laura.

>> However, it sounds to me like the bank will simply cover any overdraft up

>> to $10000 negative balance, with no money actually transferring between

>> accounts. If that is so, I'd just leave the balance as negative - it's

>> technically a loan from the bank but since the outstanding balance is the

>> overdraft amount, it's easier this way. Any financial statements should

>> show it as a Liability.

> Correct. It depends on how the bank sets up the account(s). I've seen ODP

> setup as separate bank - savings like account as well as Line of credit

> liability accounts. Just mimic the way the bank handles the transactions

> otherwise you won't be able to reconcile the account(s).