Which One of the Following Time Periods Is Included in the Accounts

question 13

Multiple Choice

Which one of the following time periods is included in the accounts receivable period but not in the cash collection period?

• A)the period of time between the receipt of a check and the availability of those funds
• B)time it takes a firm to process incoming receipts
• C)period of time a check is in the mail
• D)the amount of time that it takes a bank to credit a firm's account for a deposit made
• E)period of time it takes an invoice to reach a customer by mail

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Definitions:

Loans

Money, goods, or services given to an individual or entity with the expectation of a future repayment, typically with interest.

Reserve Requirement

A central bank regulation that sets the minimum fraction of customer deposits and notes that each commercial bank must hold as reserves rather than lend out.

Deposits

Funds placed into an account at a banking institution for safekeeping and possible interest accrual.

Reserves

Reserves refer to funds or other assets that banks or financial institutions hold to meet unexpected demands or regulatory requirements.