A Disbursement Account into Which Funds Are Transferred Only as Needed

question 18

Multiple Choice

A disbursement account into which funds are transferred only as needed to cover the demands for payment is called a(n) ____ account.

• A)master
• B)controlled disbursement
• C)bank controlled
• D)investment
• E)safety stock

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Definitions:

Operating Lease

A leasing arrangement that allows for the use of an asset without transferring ownership rights, typically treated as an operating expense in financial statements.

Long-Term Asset

An asset that is expected to provide economic benefits to a business for more than one fiscal year, such as property, plant, and equipment.

Revenue Expenditure

A type of expenditure that does not result in the acquisition of long-term assets and is rather incurred in the day-to-day operations of a business.

New Equipment

Recently acquired or installed machinery or tools intended for operational or productive use in an organization.