Which of the following is a checking account that the firm sets up so that the bank agrees to automatically transfer funds from an interest-bearing account to pay off any checks presented?
A) lockbox system
B) concentration banking
C) wire transfers
D) zero-balance account

Question

Quizplus · Accepted Answer

A zero-balance account is a checking account that the firm sets up so that the bank agrees to automatically transfer funds from an interest-bearing account to pay off any checks presented while maintaining a zero balance in the checking account. This helps the firm to efficiently manage its cash flow while also earning interest on its excess funds. Lockbox system is a system in which customers send payments directly to a post office box that is accessible only by the firm's bank, while concentration banking involves depositing funds from multiple locations into a single bank account for better cash management. Wire transfers involve electronically transferring funds between bank accounts. None of these options involve automatic transfer of funds to maintain a zero balance in the checking account.

Which of the Following Is a Checking Account That the Firm