Your fiRm Generally Receives 3 Cheques a Month

question 238

Multiple Choice

Your firm generally receives 3 cheques a month. A month is defined as a 30-day period. The cheque amounts and the collection delay for each cheque are shown below. Given this information,
What is the amount of the average daily float?

• A) $1,333.33
• B) $1,736.67
• C) $2,188.89
• D) $5,133.33
• E) $6,673.33

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Definitions:

Research And Development

Research and development (R&D) refer to the activities companies undertake to innovate and introduce new products and services.

Opportunity Costs

The cost of an alternative that is foregone to pursue a certain action, representing the benefits that could have been received from the chosen alternative.

Accelerated Depreciation

Any method that shifts depreciation forward in an asset’s life. Accelerated methods increase early charges and reduce those that come later, keeping total depreciation constant.

Tax Accounting

A method of accounting that focuses on taxes rather than the appearance of public financial statements.