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One reason many companies use a Zero Balance Checking Account is that:
Suggested Answer: D
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27 comments · newest first
MA
Martha
10 months ago
Not sure about D. Aren't reconciliations still needed?
MY
Myra
11 months ago
Totally agree with A! It helps keep funds flexible.
VA
Valda
11 months ago
Wait, do companies really get interest on these accounts?
NA
Nancey
11 months ago
I think B makes more sense. Why wait to deposit?
IL
Ilene
11 months ago
A is definitely the reason! Cash flow management is key.
TH
Thora
12 months ago
D seems unlikely since I recall that bank reconciliations are still necessary for any account type, including zero balance ones.
IS
Isadora
12 months ago
I practiced a similar question, and I feel like C could be misleading since zero balance accounts usually don't earn interest.
BE
Bernadine
12 months ago
I'm not really sure, but I remember something about how funds are only deposited when checks are cashed, so maybe B is the right choice?
EV
Eve
1 year ago
I think the answer might be A because it makes sense that companies want to keep cash available for investments.
YO
Youlanda
1 year ago
I'm pretty confident I know the answer to this one. Zero Balance Checking Accounts allow companies to hold onto their cash for as long as possible before it's needed to cover payments. That's gotta be the right answer.
YO
Yolando
1 year ago
Okay, I've got a strategy for this. The key is to focus on the main purpose of a Zero Balance Checking Account, which is to optimize the company's use of its cash. I'll evaluate each option with that in mind.
GL
Glennis
1 year ago
Hmm, I'm a little unsure about this one. I know Zero Balance Checking Accounts have something to do with managing cash flow, but I'm not totally clear on the specifics. I'll have to think it through carefully.
LE
Lea
1 year ago
This seems like a straightforward question about the benefits of a Zero Balance Checking Account. I'll carefully read through the options and think about which one best explains why companies use this type of account.
FL
Flo
1 year ago
Hmm, I'm going with A. Keeping the cash in the account until it's needed sounds like a smart move to me. Plus, it'll make the company look super organized.
OR
Oren
1 year ago
C) the company receives interest on the account? Seriously? This is a checking account, not a savings account. I think someone's been drinking too much coffee during their lunch break.
BR
Britt
1 year ago
D) bank reconciliations are not required? Sign me up! I'd rather spend my time playing Angry Birds than balancing the books.
TE
Tequila
1 year ago
Option A seems legit. I like the idea of having cash available for investing until the check clears. Cha-ching!
MA
Marcos
1 year ago
A Zero Balance Checking Account? That's like having an empty piggy bank - how are you supposed to buy candy with that?
DE
Devora
1 year ago
C) the company receives interest on the account
PA
Pamella
1 year ago
B) funds do not have to be deposited until the EE cashes the check
PR
Precious
1 year ago
C) the company receives interest on the account
CA
Carin
1 year ago
A) cash is available for investment until items are presented for payment at the company's bank
JE
Jesus
1 year ago
B) funds do not have to be deposited until the EE cashes the check
LO
Louis
1 year ago
A) cash is available for investment until items are presented for payment at the company's bank
CI
Ciara
2 years ago
I'm not sure, but I think C) the company receives interest on the account could also be a reason for using a Zero Balance Checking Account.
TA
Tammi
2 years ago
I agree with Ellsworth, having cash available for investment can be beneficial for the company.
EL
Ellsworth
2 years ago
I think the answer is A) cash is available for investment until items are presented for payment at the company's bank.