Upon dissolution, a firm settles all assets and liabilities. A bank overdraft, as a liability, requires resolution. The procedure is as follows:
During dissolution, all outstanding liabilities are discharged using available funds, and remaining assets are liquidated to cover these liabilities.
The Realisation Account records asset sales and liability settlements but typically does not receive liabilities like a bank overdraft.
Liabilities such as a bank overdraft are settled directly via the firm's Bank Account.
Conclusion: A bank overdraft is directed to the Bank Account during dissolution, as all liabilities must be cleared through this account for effective settlement.
Consequently, the accurate designation is the Bank Account.