The Period of Time Between the Issuance of a Cheque

question 108

Multiple Choice

The period of time between the issuance of a cheque by a firm and the deduction of the amount of the cheque from the firm's bank account creates the:

• A) Processing delay.
• B) Disbursement float.
• C) Availability delay.
• D) Collection float.
• E) Lockbox period.

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Definitions:

Unit Product Cost

The total cost (both fixed and variable) incurred to produce, store, and sell one unit of a product.

Variable Costing

An accounting method that only considers variable costs for product costing, excluding fixed overheads.

Net Operating Income

Net operating income is the total profit a company generates from its operations, excluding taxes and interest, highlighting operational efficiency.

Absorption Costing

An accounting tactic where the entirety of manufacturing costs—direct materials, direct labor, and manufacturing overhead, both variable and fixed—are included in calculating a product’s cost.