Which of the Following Statements Concerning Zero Balance Accounts Is

question 109

Multiple Choice

Which of the following statements concerning zero balance accounts is not correct?

• A)They are set up to handle disbursement activity.
• B)The account has a minimum amount at all times.
• C)Cheques are automatically transferred into the account as cheques presented for
• Payment.
• D)The transfer is automatic and involves an accounting entry only.
• E)The master and the zero balance account locate at the same bank.

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Definitions:

Actual Level

The real, measured level of production, performance, or activity, as opposed to planned or theoretical levels.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular category or period, indicating over or under spending.

Planning Budget

A financial plan that estimates the revenue and expenses for a specific period, often used for setting performance expectations.

Revenue and Spending Variance

The difference between the budgeted and actual amounts of revenue and expenditure over a specific period.