Which of the following should NOT be added to the net demand deposit account balance when assessing pledged assets?

When assessing pledged assets against a net demand deposit account balance, it is important to consider the liquidity and actual available funds that can be pledged. Overdrafts represent a situation where the account balance can go negative, which means that they are not actual funds available for use. Instead, they indicate that the account holder has borrowed funds to cover transactions, usually subject to fees and interest.

Consequently, overdrafts should not be included when calculating the total balance that can be pledged, as they do not reflect actual liquid assets of the account. In contrast, outstanding checks and interest-bearing accounts, while they might affect available cash flow temporarily, still have an underlying balance that can be pledged or considered as a financial position. Similarly, available cash reserves represent actual funds that can be readily accessed or pledged.

Thus, the rationale for excluding overdrafts lies in their nature as borrowed funds rather than available liquidity, making them unsuitable for assessment of pledged assets.