In the Banking System,the Time for Dishonor of a Check

question 12

True/False

In the banking system,the time for dishonor of a check can vary greatly depending on the number of banks involved in the collection process.

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Definitions:

Cash Concentration Account

A bank account used by companies to consolidate and manage cash from multiple locations or accounts, improving liquidity management.

Collection Float

The time delay between when a check is written and when it is actually deducted from the payer's account, impacting the receiver's cash flow.

Disbursement Float

The time delay between when a check is issued and when the funds are actually withdrawn from the payer's account.

Ledger Balance

The total amount recorded in a company's ledger, representing the total assets, liabilities, and shareholders' equity at a specific time.