A banking sub-account that is used for a particular disbursement purpose and into which funds are
deposited only as needed to cover cheques presented for payment is called a ______ account.

Question

Quizplus · Accepted Answer

A zero-balance account is designed for a particular disbursement purpose where funds are deposited only when required to cover cheques presented for payment. The account must maintain a zero balance at the end of the day, which means any excess funds are transferred to another account or used to pay down outstanding loans. Lockbox is used for the collection of payments, controlled collection is used to centralize and manage the collection process, disbursement float refers to the time between payment authorization and the actual transactions, and cash concentration is used to centralize cash balances.

A Banking Sub-Account That Is Used for a Particular Disbursement