Final answer:
A negative asset class balance occurs when the value of assets falls below the liabilities, leading to negative net worth. For banks, this could lead to bankruptcy, as their liabilities override their assets. Individuals might face overdraft fees or transaction rejections in case of negative balances in their accounts.
Step-by-step explanation:
When a sale results in a negative asset class balance, it indicates that the total value of the assets in that class is less than the corresponding liabilities, resulting in a negative net worth for that category. For banks, negative net worth occurs when the bank's liabilities exceed its assets, which can lead to bankruptcy. In such situations, the balance sheet is an essential tool for understanding the financial standing. Assets declining in value, for instance through unexpected defaults, can cause a negative net worth. If an individual spends more funds than what is available in their account, the negative balance might result in overdraft fees or rejected transactions.