Kelly's Corner Writes 18 Checks a Day for an Average

question 51

Multiple Choice

Kelly's Corner writes 18 checks a day for an average amount of $630 each. These checks generally clear the bank 2.5 days after they are written. In addition, the firm generally receives an average of $16,400 a day in checks. Deposited amounts are available after 2 days. What is the amount of the firm's disbursement float?

• A) $22,680
• B) $25,800
• C) $28,350
• D) $29,840
• E) $32,800

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Definitions:

Creditor Litigation

Legal proceedings initiated by a creditor to collect debts owed by a debtor who has failed to make payments.

Chapter 7 Bankruptcy

A chapter of the Bankruptcy Code that provides for the liquidation of a debtor's non-exempt assets to pay off creditors.

Automatic Stay

A legal provision that temporarily stops lawsuits, foreclosures, garnishments, and all collection activity against a debtor the moment a bankruptcy petition is filed.

Secured Creditors

Creditors who have a legal right to seize specific assets of the borrower if the borrower fails to repay the debt as agreed.