A Sweep Account Is a Checking Account That ________

question 86

Multiple Choice

A sweep account is a checking account that ________.

• A)bears interest, allowing depositors to write checks without tying up money for a specific period of time
• B)never has funds as they are drawn from a master account
• C)automatically moves all funds in a company's checking account above a predetermined minimum into an interest-bearing account
• D)need to be reviewed and updated on a regular basis

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Definitions:

Avoidable Interest

Interest cost on funds expended on a qualifying asset that could be avoided if the expenditure had not been made.

Economic Benefit

The gain received from a product or service, often measured in terms of increased utility or revenue, minus associated costs.

R&D Costs

Expenses incurred during the research and development phase aimed at producing new products or processes.

GAAP

Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures used in the United States.