On dissolution of a firm, bank overdraft is transferred to:

The correct option/answer is: Bank Account.

Explanation:
When a partnership firm is dissolved, all assets and third-party liabilities are generally transferred to the Realisation Account to facilitate the winding-up process. However, bank overdraft behaves differently depending on the accounting practice adopted.

Under the standard approach where a bank account (or cash account) is maintained to record final receipts and payments during dissolution, a bank overdraft is treated as a negative bank balance (a credit balance in the cash/bank book) rather than an ordinary external liability. Consequently, instead of transferring the overdraft to the Realisation Account, it is directly adjusted by showing it as the opening credit balance in the Bank Account. All dissolution transactions (realization of assets and payment of liabilities) are then processed through this Bank Account, and the overdraft is settled naturally as funds are deposited.