A disbursement 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 _____ account.

Question

Quizplus · Accepted Answer

A zero-balance account is a disbursement account that does not maintain a balance, with funds being transferred in from a master account only when necessary to cover demands for payment. This type of account helps firms to maximize available funds by minimizing idle balances.

A Disbursement Account for Which the ﬁRm Maintains No Balance