overdraft

Dont mean to sound dumb but....what will I set the account up as for the
overdraft and transferring the funds into the bank acct will then leave that
with neg. balance. In that case how do I record a transaction to replace
it. This one has me totally confused.:s Sorry


"Laura" <invalid.TakeThisOut@sample.invalid> wrote in message
news:xECkk.280273$SV4.101729@bgtnsc04-news.ops.worldnet.att.net...
> "Me" <ijrideout.TakeThisOut@nf.sympatico.ca> wrote in message
> news:4892f06e$0$4044$9a566e8b@news.aliant.net...
>> hopefully the last question:
>>
>> how to i add an overdraft to a bank account? how is that set up?
>>
>> thanks
>
> You don't.
>
> Just replicate the transactions that take place on the bank statement.
> Transfer the money from the other account as a deposit plus record any
> fees they charge for using the overdraft protection.
 >> Stay informed about: overdraft 

Me wrote:
> Dont mean to sound dumb but....what will I set the account up as for the
> overdraft and transferring the funds into the bank acct will then leave that
> with neg. balance. In that case how do I record a transaction to replace
> it. This one has me totally confused.:s Sorry
....
As said, just make the transactions as they occur -- the overdraft
_will_ cause a negative balance (as it did in reality kicking in the
overdraft protection transfer) -- so then add the deposit of the
protection amount and deduct the applicable fees.

Where the money came from depends on whether you have another account w/
automatic transfer or whether it triggered a pre-approved loan transaction.

--
 >> Stay informed about: overdraft 

I have one bank acct with an overdraft. thats it. So the acct it came from
would be..? (new to this) if the neg acct is showing then when i make a
deposit into the bank afterward it bank acct. will go up but the overdraft
will still be the same. Basiclly how do i set it up and how would i do a
transaction to replace to overdraft?

thanks

"dpb" <none.RemoveThis@non.net> wrote in message news:g6v32c$3c0$1@aioe.org...
> Me wrote:
>> Dont mean to sound dumb but....what will I set the account up as for the
>> overdraft and transferring the funds into the bank acct will then leave
>> that with neg. balance. In that case how do I record a transaction to
>> replace it. This one has me totally confused.:s Sorry
> ...
> As said, just make the transactions as they occur -- the overdraft _will_
> cause a negative balance (as it did in reality kicking in the overdraft
> protection transfer) -- so then add the deposit of the protection amount
> and deduct the applicable fees.
>
> Where the money came from depends on whether you have another account w/
> automatic transfer or whether it triggered a pre-approved loan
> transaction.
>
> --
 >> Stay informed about: overdraft 

Me wrote:
> I have one bank acct with an overdraft. thats it. So the acct it came from
> would be..? (new to this) if the neg acct is showing then when i make a
> deposit into the bank afterward it bank acct. will go up but the overdraft
> will still be the same. Basiclly how do i set it up and how would i do a
> transaction to replace to overdraft?
>
> thanks
>
> "dpb" <none.TakeThisOut@non.net> wrote in message news:g6v32c$3c0$1@aioe.org...
>> Me wrote:
>>> Dont mean to sound dumb but....what will I set the account up as for the
>>> overdraft and transferring the funds into the bank acct will then leave
>>> that with neg. balance. In that case how do I record a transaction to
>>> replace it. This one has me totally confused.:s Sorry
>> ...
>> As said, just make the transactions as they occur -- the overdraft _will_
>> cause a negative balance (as it did in reality kicking in the overdraft
>> protection transfer) -- so then add the deposit of the protection amount
>> and deduct the applicable fees.
>>
>> Where the money came from depends on whether you have another account w/
>> automatic transfer or whether it triggered a pre-approved loan
>> transaction.
>>
>> --
>
>

Sounds like the bank gave you a loan. A loan is of course a chart of accounts
item. That begin to make sense? In other words the loan account which has
never before been used wasn't on your chart of accounts with a zero balance, so
you need to correct that oversight and then you can record your transactions.
You will also need an expense account for the interest they charge, but I assume
you had that part figured out.
 >> Stay informed about: overdraft 

Me wrote:
> I have one bank acct with an overdraft. thats it. So the acct it came from
> would be..? (new to this) if the neg acct is showing then when i make a
> deposit into the bank afterward it bank acct. will go up but the overdraft
> will still be the same. Basiclly how do i set it up and how would i do a
> transaction to replace to overdraft?
....

If you had an overdraft, then you had an overdraft -- there is no
transaction to make reality disappear.

If what you're saying is the bank simply floated you the money (used to
be not so uncommon for small amounts w/ local banks; pretty unusual in
today's markets) then that's all there is.

It's not fully clear what actually transpired, however, sorry...don't
know of anything else to say at this point.

--
 >> Stay informed about: overdraft 

Gary Charpentier wrote:
....
> Sounds like the bank gave you a loan. ...

I guess, but I surely can't tell from what's been said so far,
particularly this last response...

I can't parse

> I have one bank acct with an overdraft. thats it.

as to what that means, precisely.

--
 >> Stay informed about: overdraft 

An overdraft is not a transaction in itself, it is simply a negative balance
in your bank account. It is a result of transactions (checks & deposits
which you record as usual), but does not get recorded as a separate
transaction.

As for what gets recorded because of an overdraft, as others have stated it
depends on the type of protection you have:

Automatic transfer from another of your bank accounts = record a transfer.

Automatic deposit from the bank as a loan = record a deposit charging
against the loan payable.

Bank covers the overdraft by allowing it to remain negative = no transaction
as no $ changed hands. In this case you most likely would need to make a
deposit (or have an outstanding deposit post) to clear up the overdraft
balance.

In each of these instances there are probably fees and/or interest
associated with the overdraft (negative) balance and the banks actions
resulting from it. You would record these as separate transactions,
allocating to bank fees & interest expense accounts.



"Me" <ijrideout.DeleteThis@nf.sympatico.ca> wrote in message
news:48931fb9$0$4037$9a566e8b@news.aliant.net...
>I have one bank acct with an overdraft. thats it. So the acct it came from
>would be..? (new to this) if the neg acct is showing then when i make a
>deposit into the bank afterward it bank acct. will go up but the overdraft
>will still be the same. Basiclly how do i set it up and how would i do a
>transaction to replace to overdraft?
>
> thanks
>
> "dpb" <none.DeleteThis@non.net> wrote in message news:g6v32c$3c0$1@aioe.org...
>> Me wrote:
>>> Dont mean to sound dumb but....what will I set the account up as for the
>>> overdraft and transferring the funds into the bank acct will then leave
>>> that with neg. balance. In that case how do I record a transaction to
>>> replace it. This one has me totally confused.:s Sorry
>> ...
>> As said, just make the transactions as they occur -- the overdraft _will_
>> cause a negative balance (as it did in reality kicking in the overdraft
>> protection transfer) -- so then add the deposit of the protection amount
>> and deduct the applicable fees.
>>
>> Where the money came from depends on whether you have another account w/
>> automatic transfer or whether it triggered a pre-approved loan
>> transaction.
>>
>> --
>
>
 >> Stay informed about: overdraft 

"Scott" <beamersrqNOSPAM DeleteThis @comcast.net> wrote:

>An overdraft is not a transaction in itself, it is simply a negative balance
>in your bank account. It is a result of transactions (checks & deposits
>which you record as usual), but does not get recorded as a separate
>transaction.
>
>As for what gets recorded because of an overdraft, as others have stated it
>depends on the type of protection you have:
>
>Automatic transfer from another of your bank accounts = record a transfer.
>
>Automatic deposit from the bank as a loan = record a deposit charging
>against the loan payable.
>
>Bank covers the overdraft by allowing it to remain negative = no transaction
>as no $ changed hands. In this case you most likely would need to make a
>deposit (or have an outstanding deposit post) to clear up the overdraft
>balance.
>
>In each of these instances there are probably fees and/or interest
>associated with the overdraft (negative) balance and the banks actions
>resulting from it. You would record these as separate transactions,
>allocating to bank fees & interest expense accounts.
>
>
>
>"Me" <ijrideout DeleteThis @nf.sympatico.ca> wrote in message
>news:48931fb9$0$4037$9a566e8b@news.aliant.net...
>>I have one bank acct with an overdraft. thats it. So the acct it came from
>>would be..? (new to this) if the neg acct is showing then when i make a
>>deposit into the bank afterward it bank acct. will go up but the overdraft
>>will still be the same. Basiclly how do i set it up and how would i do a
>>transaction to replace to overdraft?
>>
>> thanks
>>
>> "dpb" <none DeleteThis @non.net> wrote in message news:g6v32c$3c0$1@aioe.org...
>>> Me wrote:
>>>> Dont mean to sound dumb but....what will I set the account up as for the
>>>> overdraft and transferring the funds into the bank acct will then leave
>>>> that with neg. balance. In that case how do I record a transaction to
>>>> replace it. This one has me totally confused.:s Sorry
>>> ...
>>> As said, just make the transactions as they occur -- the overdraft _will_
>>> cause a negative balance (as it did in reality kicking in the overdraft
>>> protection transfer) -- so then add the deposit of the protection amount
>>> and deduct the applicable fees.
>>>
>>> Where the money came from depends on whether you have another account w/
>>> automatic transfer or whether it triggered a pre-approved loan
>>> transaction.
>>>
>>> --
>>
>>
>
I have clients that have Reserve Accounts that cover ODs. Money that is put into your
account is simply a loan that has to be repaid with a deposit. My bank charges an OD
charge of $27.00 per item paid. There is really no account involved. A checking
account with a negative balance is classified as a current liability and not a negative
current asset. You can have a Reserve Account that works like a credit card account
and charges 18% per annum. The bank will make an ODP payment each month
which is just a minimum paydown of the ODP balance due, which includes interest.
 >> Stay informed about: overdraft