Question 1 Introduction
A bank overdraft is used to cover the day-to-day net current asset (working capital) requirements of a business.
Private sector organisations include businesses set up as sole traders, partnerships and limited companies.
A sole trader owns his or her business but has limited liability for business debts.
A sole trader has the advantage that he or she will receive the whole profit of the business (subject to tax).
A sole trader has the advantage that he or she will normally work shorter hours than most business owners and can take holidays whenever he or she wants.
A bank overdraft is used to cover the day-to-day net current asset (working capital) requirements of a business.
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