Efficient Funds Management Attempts to Reduce Mailing and Clearing Time

question 89

Multiple Choice

Efficient funds management attempts to reduce mailing and clearing time. Two methods do this by:

• A) moving collections and deposits closer together in concentration banks; and moving
• surplus funds quickly by wire transfers.
• B) moving mailing points to cross country locations and using depository drafts to transfer
• funds.
• C) drawing cheques against zero balance accounts and using cross country mailing.
• D) wiring funds to zero balance accounts and using lockboxes in many cities.
• E) None of the above.

---

Definitions:

Batch-Level Activities

These are tasks or operations that are performed for a batch of products, rather than for each individual unit or continuously for the whole process.

First-Stage Allocation

The process by which overhead costs are assigned to activity cost pools in an activity-based costing system.

ABC System

The Activity-Based Costing system that assigns manufacturing overhead costs to products in a more logical manner by taking into account the specific activities that incur costs.

Activity Cost Pools

Groups of related costs that are associated with particular activities, used in activity-based costing.