Cash concentration accounts:

Question

Quizplus · Accepted Answer

Cash concentration accounts, by consolidating funds from multiple accounts, tend to increase the funds available for short-term investing.

Answer: B 
 Cash concentration accounts can increase the complexity of a firm's cash management system, as they require careful monitoring and management to prevent errors or fraud.

Answer: C 
 Cash concentration accounts that utilize wire transfers are typically more expensive to maintain than those that use automated clearing house transfers.

Answer: E 
 Zero-balance accounts are a common type of cash concentration account in which the account balance is automatically swept to zero at the end of each day, reducing the need for manual transfers and simplifying cash management.

Therefore, choices A, B, C, and E are all valid explanations for different aspects of cash concentration accounts.

Cash Concentration Accounts