Centralized control over disbursements is assisted by which of the following cash management techniques?
A) lockbox system
B) zero balance accounts
C) payable-through drafts
D) both B and C

Question

Quizplus · Accepted Answer

Both zero balance accounts and payable-through drafts assist centralized control over disbursements. Zero balance accounts ensure that each subsidiary account is empty at the end of each day, with excess funds transferring to a central concentration account. Payable-through drafts are checks drawn by a corporation’s bank against the corporation’s account that is payable to a supplier. The supplier is required to deposit the draft into its own account, and the corporation can control the disbursement from its main account. The lockbox system, on the other hand, is a collection system that accelerates cash receipts, but it does not directly assist centralized control over disbursements.

Centralized Control Over Disbursements Is Assisted by Which of the Following