Zero-balance account

A zero-balance account (ZBA) is a checking account in which zero balance is maintained by transfers of funds from a master account in an amount only large enough to cover the checks presented.

Similar financial terms

Accounting liquidity
The ease and quickness with which assets can be converted into cash

Accounts payable
Money a company owes to its suppliers

Accounts receivable
Money owed to a company by its customers

Accounting reference date
The date to which accounts are made up for a company. When a company is incorporated, it will normally have an accounting reference date which is the last day of the month in which the anniversary of its incorporation falls. Directors can change the accounting reference date by filing an appropriate form with the Registrar of Companies.

Accounting
The process of recording a firm's financial transactions in appropriate bookkeeping records, and the summary of this information in the form of accounting (annual, interim)reports.

Accounting exposure
The change in the value of a firm's foreign currency denominated accounts due to a change in exchange rates.

Accounting earnings
Earnings of a firm as reported on its income statement.

Accounting insolvency
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on the books.

Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how quickly customers pay their bills.

Nostro accounts
As there is no dollar cleraing and settlement system outside the USA, all eurodoolar transactions must take place through banks in New York using their clearing house system. Therefore all banks operating outside the USA and dealing in eurodollars must hold demand deposit accounts with US-based banks in New York through which receipts and payments can be effected.

These accounts, known as Nostro accounts, are also used to settle banks' foreign exchange transactions and to enable them to ...

TT&L account
Treasury tax and loan account at a bank.

Sweep account
Account in which the bank takes all of the excess available funds at the close of each business day and invests them for the firm.

Statement of Financial Accounting Standards No. 52
This is the currency translation standard currently used by U.S. firms. It mandates the use of the current rate method.

Statement of Financial Accounting Standards No. 8
This is a currency translation standard previously in use by U.S. accounting firms.

Regulatory accounting procedures
Accounting principals required by the FHLB that allow S&Ls to elect annually to defer gains and losses on the sale of assets and amortize these deferrals over the average life of the asset sold.

Purchase accounting
Method of accounting for a merger in which the acquirer is treated as having purchased the assets and assumed liabilities of the acquiree, which are all written up or down to their respective fair market values, the difference between the purchase price and the net assets acquired being attributed to goodwill.

Open account
Arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt, and the seller records the sale in the sales ledger.

Omnibus account
An account carried by one futures commission merchant with another futures commission merchant in which the transactions of two or more persons are combined and carried in the name of the originating broker, rather than designated separately.

Money market demand account
An account that pays interest based on short-term interest rates.

Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by the stock and, if the value of the stock drops sufficiently, the owner will be asked to either put in more cash, or sell a portion of the stock. Margin rules are federally regulated, but margin requirements and interest may vary among broker/dealers.

Capital account
Net result of public and private international investment and lending activities.

Capital Builder Account (CBA)
A Merrill Lynch brokerage account that allows investors to access the loan value of his or her eligible securities to buy or sell securities. Excess cash in a CBA can be invested in a money market fund or an insured money market deposit account without losing access to the money.

Concentration account
A single centralized account into which funds collected at regional locations (lockboxes) are transferred.

Cumulative Translation Adjustment (CTA) account
An entry in a translated balance sheet in which gains and/or losses from translation have been accumulated over a period of years. The CTA account is required under the FASB No. 52 rule.

Current account
Net flow of goods, services, and unilateral transactions (gifts) between countries.

IRA (Individual Retirement Account)
A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund. Individuals can place IRA funds in bank accounts or in other forms of investment such as stocks, bonds, or mutual funds.

Discretionary Account
An arrangement by which the holder of an account gives written power of attorney to someone else, often a broker, to buy and sell without prior approval of the holder; often referred to as a "managed account" or "controlled account".

Omnibus Account
An account carried by one futures commission merchant with another futures commission merchant in which the transactions of two or more persons are combined and carried in the name of the originating broker rather than designated separately.

Creative accounting
The reporting of profit and asset figures in a way that is flattering to the company. A company's senior managers can 'window dress' the profits for any trading period to impress shareholders - however, interpretation of accounting data in this way is actively discouraged by the professional accounting bodies.

Profit and Loss Account
An accounting statement that shows a company's trading position over a given period of time - usually the financial year. This statement details the sales revenue and business expenditure over the period. In the account, the cost of sales is deducted from the sales income to provide a gross profit. From this, other items of expenditure, such as salaries, rent, rates and other itemised costs are deducted to show a net profit (or loss). In US and under IFRS known as the Income Statement.

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Paydown

In a Treasury refunding, the amount by which the par value of the securities maturing exceeds that of those sold.


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