Future Business Leaders of America (FBLA) Accounting Practice Test

Which accounting tool allows a business to manage funds for day-to-day operations?

1. Savings Account

2. Mutual Fund

3. Checking Account

4. Investment Account

The correct answer is: Checking Account

The checking account is specifically designed for handling daily financial transactions, making it an essential tool for managing funds for day-to-day operations. This type of account allows a business to deposit and withdraw money quickly and efficiently, facilitating the payment of expenses such as wages, utility bills, and supplies. Checking accounts also come with various features, such as checks, debit cards, and online banking services, which enhance the ease and speed of accessing funds. This capability is critical for businesses that require immediate access to cash for routine operations and transactions. The nature of a checking account, with its focus on liquidity and frequent transactions, aligns perfectly with the needs of a business managing its daily operational funds.