An arrangement in which customers mail their payments on account to a post office box which the company's bank monitors,from which it collects the payments,and then immediately deposits the payments into the firm's interest-bearing account is called a:
A)zero balance account.
B)lockbox.
C)sweep account.
D)credit reference.

Question

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This arrangement is called a lockbox, where the customers mail their payments to a post office box that is monitored by the company's bank. Once the bank receives the payments, it immediately deposits them into the company's interest-bearing account. This helps the company to receive faster access to its funds and improves cash flow management. A zero balance account is a checking account where the balance is automatically swept into a higher-earning account at the end of each day. A sweep account is a similar type of account where excess funds are automatically transferred to a higher-earning account. A credit reference is a document used by lenders to evaluate a person's or a company's creditworthiness.

An Arrangement in Which Customers Mail Their Payments on Account