A bank account that technically never has funds in it but is tied to another master account so that when checks are presented for payment the master account is debited,permitting the company to use its own money during the "float" period,is called a(n):
A)cash account.
B)accrual account.
C)sweep account.
D)zero balance account.

Question

Quizplus · Accepted Answer

A zero balance account is a type of bank account that is linked to a master account and is designed to automatically maintain a zero balance by transferring funds from or to the master account, thereby ensuring that there is always just enough cash in the account to cover the checks that are written on it. This allows a company to effectively use its funds during the "float" period when checks have been issued but have not yet cleared, without having to maintain a minimum balance in the account.

A Bank Account That Technically Never Has Funds in It