Your fiRm Generally Receives 5 Cheques a Month

question 258

Multiple Choice

Your firm generally receives 5 cheques a month. The cheque amounts and the collection delay for each cheque is shown below. Given this information what is the amount of the average daily float?
Assume a 30-day month.

• A) $2,108
• B) $3,143
• C) $7,254
• D) $13,720
• E) $18,860

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Definitions:

Traveler's Check

A preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for this privilege.

Payable On Demand

A term indicating that a payment is to be made immediately or whenever requested by the entitled party.

Countersignature

An additional signature required on a document or check to verify or approve its legitimacy, often used for security or authorization purposes.

Paper Currency

Legal tender issued by a government or central bank in the form of paper notes.