Your Firm Generally Receives Only 2 Checks a Month

question 218

Multiple Choice

Your firm generally receives only 2 checks a month. The check amounts and the collection delay for each check are shown below. Given this information, what is the amount of the average daily float? Assume that a month has 30 days.

• A) $533.33
• B) $833.33
• C) $1,333.33
• D) $2,666.67
• E) $4,000.00

---

Definitions:

Adjusted

Modified or changed to correct or alter a previous situation, figure, or account.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from operating revenue, excluding taxes and interest.

Raw Materials Account

An account used to track the cost of raw materials not yet used in production in a company's inventory.

Ending Balance

The amount of money remaining in an account at the conclusion of a time period, after all additions and subtractions have been accounted for.