Asked by Suzette Miranda on Jul 27, 2024
Verified
Which of the following is the best definition of debit card?
A) The costs associated with holding too little cash.
B) An automated teller machine card used at the point of purchase to avoid the use of cash. As this is not a credit card, money must be available in the user's bank account.
C) A chequing account in which a zero balance is maintained by transfers of funds from a master account in an amount only large enough to cover cheques presented.
D) The need to hold cash to satisfy normal disbursement and collection activities associated with a firm's ongoing operations
E) A firm's desired cash level as determined by the trade-off between carrying costs and shortage costs.
Debit Card
An automated teller machine card used at the point of purchase to avoid the use of cash. As this is not a credit card, money must be available in the user’s bank account.
Automated Teller Machine Card
A plastic card linked to a bank account, used at ATMs for transactions such as cash withdrawals, deposits, and balance checks.
Bank Account
A bank account is a financial account maintained by a banking institution in which the deposits, withdrawals, and balances of cash are recorded for the account holder.
- Elucidate critical terminology pertinent to cash management, such as target cash balance, zero-balance account, and the rationale behind transactions.
Verified Answer
SP
Shilvi PatelAug 01, 2024
Final Answer :
B
Explanation :
A debit card is directly linked to the user's bank account, allowing for transactions to be made without cash, provided there are sufficient funds in the account.
Learning Objectives
- Elucidate critical terminology pertinent to cash management, such as target cash balance, zero-balance account, and the rationale behind transactions.