A chequing 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 ____________.

A) lockbox account
B) cleanup account
C) compensating balance account
D) zero-balance account
E) revolving account

Zero-balance Account

A type of bank account that maintains a balance of zero, with funds being transferred into it to cover checks written or transactions made.

Master Account

An overarching account that holds multiple sub-accounts, often used by businesses to manage various funds or investments.

Demands for Payment

Requests or invoices issued by creditors or suppliers for the settlement of outstanding debts.