Average Daily Remittances Are $5 Million,and "Extended Disbursement Float" Adds

question 145

Multiple Choice

Average daily remittances are $5 million,and "extended disbursement float" adds 3 days to the disbursement schedule,how much should the firm be willing to pay for a cash management system if the firm earns 10% on excess funds.

• A) $500,000
• B) $1,500,000
• C) $1,000,000
• D) $0

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Definitions:

Income Statement Debit

A transaction or expense that decreases net income on the income statement.

Net Loss

The amount by which expenses exceed revenues.

Adjustments

These are entries made in accounting to record expenses that have occurred but are not accurately represented in the financial statements at the end of the accounting period.

Journal

A detailed record where all financial transactions of a business are initially recorded before being summarized in the ledger.