What term describes having a negative balance in your account?

What term describes having a negative balance in your account?

• A. Deposit
• B. Withdrawal
• C. Overdrawn
• D. Balance

Answer: (C)

Having a negative balance means your withdrawals have exceeded your deposits, so the balance goes below zero. The term for this is overdrawn. This describes the real situation: you owe the bank money because you spent more than you had. Deposits add money back into the account, while withdrawals reduce it. The balance is just the current amount you have. For example, if you start with $20 and spend $25, you would be overdrawn by $5. Fees can sometimes come with being overdrawn, and some accounts offer overdraft protection to cover shortfalls.

Having a negative balance means your withdrawals have exceeded your deposits, so the balance goes below zero. The term for this is overdrawn. This describes the real situation: you owe the bank money because you spent more than you had. Deposits add money back into the account, while withdrawals reduce it. The balance is just the current amount you have. For example, if you start with $20 and spend $25, you would be overdrawn by $5. Fees can sometimes come with being overdrawn, and some accounts offer overdraft protection to cover shortfalls.