A system by which firms assign their customers for collection purposes to regional banks that transfer funds to a central bank is known as:
A) a lock-box system.
B) a zero-balance account.
C) a wire transfer.
D) concentration banking.

Question

Quizplus · Accepted Answer

Concentration banking is a system where firms assign their customers for collection purposes to regional banks that transfer funds to a central bank. This allows for efficient collection and monitoring of funds from different locations. A lock-box system refers to a method of collecting and processing payments at a bank's post office box rather than at the customer's location. A zero-balance account is a checking account that automatically transfers funds from a master account to cover any checks that are written. Wire transfer is a method of electronically transferring funds from one person or institution to another.

A System by Which Firms Assign Their Customers for Collection