Asked by Mindy Bounheuangvilay on Jul 08, 2024
Verified
A zero-balance account helps the firm free up surplus cash.
Zero-balance Account
A type of bank account that maintains a balance of zero by automatically transferring funds from a master account in amounts only large enough to cover checks presented.
Surplus Cash
Excess cash that a company holds over and above the minimum operational funds required, often used for investment, dividends, or buybacks.
- Acquire insight into the purposes behind cash management and the approaches for adept cash handling and investing.
Verified Answer
MZ
Maoting ZhongJul 09, 2024
Final Answer :
True
Explanation :
A zero-balance account is designed to maintain a balance of $0 by automatically transferring funds from a master account in the exact amount of transactions that occur, which helps in efficiently managing and utilizing surplus cash for other investments or operational needs.
Learning Objectives
- Acquire insight into the purposes behind cash management and the approaches for adept cash handling and investing.