Managing a firm's cash outflows through use of a "zero balance account" system offers all but which of the following benefits?
A) centralized control over disbursements
B) reduction of management time spent on superficial cash management activities
C) higher rate of return on invested funds
D) reduction of excess balances in outlying accounts

Question

Quizplus · Accepted Answer

The zero balance account system is designed to enable a firm to centralize control of its disbursements by maintaining a zero balance in subsidiary accounts. This helps to reduce excess balances in outlying accounts and also saves management time spent on superficial cash management activities. However, the use of a zero balance account system does not necessarily offer a higher rate of return on invested funds as the funds are typically not held in interest-bearing accounts.

Managing a Firm's Cash Outflows Through Use of a "Zero