If Creditors Add Finance Charges After Subtracting Payments Made During

question 73

True/False

If creditors add finance charges after subtracting payments made during the billing period, this is called the previous balance method.

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Definitions:

Weighted Average Float

Weighted average float refers to the average time between when a check is deposited in a bank and when the funds are made available, weighted by the value of each check.

Clearing Times

The period it takes for a transaction to be processed, confirmed, and settled between buyer and seller in the financial markets.

Weighted Average Delay

implies the average time delay in a process or system, adjusted for the importance or frequency of each delay component.