Asked by juan manuel iglesias on Jul 07, 2024
Verified
A banking sub-account that is used for a particular disbursement purpose and into which funds are deposited only as needed to cover cheques presented for payment is called a ______ account.
A) Zero-balance.
B) Lockbox.
C) Controlled collection.
D) Disbursement float.
E) Cash concentration.
Zero-balance Account
A banking arrangement where a company’s bank account is maintained at a zero balance, with funds being transferred from a master account as needed.
Disbursement Purpose
The specific reason or objective for which funds are paid out or disbursed in a financial transaction.
Cheques Presented
Refers to the cheques that have been submitted to a bank for payment and are pending clearance.
- Gain insight into the functions and positive aspects of concentration accounts, lockboxes, and zero-balance accounts in treasury management.
Verified Answer
JT
Jazbeth TrevinoJul 14, 2024
Final Answer :
A
Explanation :
A zero-balance account is specifically designed for the purpose described. It maintains a balance of zero by automatically transferring funds from a master account in the exact amount needed to cover checks presented for payment, ensuring efficient cash management and minimizing idle funds.
Learning Objectives
- Gain insight into the functions and positive aspects of concentration accounts, lockboxes, and zero-balance accounts in treasury management.