Asked by Jonathan Philley on Jul 05, 2024
Verified
A disbursement account for which the firm maintains no balance, transferring in funds from a master account only when needed to cover demands for payment, is called a _____ account.
A) lockbox
B) cleanup
C) compensating balance
D) zero-balance
E) revolving
Zero-Balance Account
A bank account in which the balance is maintained at zero by automatically transferring funds from a master account.
Compensating Balance
A compensating balance is a minimum balance that must be maintained in a bank account, required by some banks in order for their customers to obtain or maintain a loan.
Master Account
A central account that holds funds or securities, often used by institutions to manage multiple sub-accounts.
- Gain insight into the aims and benefits of assorted cash management tools, encompassing lockbox systems, zero-balance accounts, and cash concentration accounts.
Verified Answer
KG
Kristofer GaliettiJul 11, 2024
Final Answer :
D
Explanation :
A zero-balance account is specifically designed to maintain a balance of zero by transferring only enough funds from a master account to cover checks presented or payments due, eliminating the need to keep a working balance in the account.
Learning Objectives
- Gain insight into the aims and benefits of assorted cash management tools, encompassing lockbox systems, zero-balance accounts, and cash concentration accounts.