What Is the Purpose of a Lockbox Plan

question 118

Multiple Choice

What is the purpose of a lockbox plan?

• A)It is used for safekeeping cash and marketable securities.
• B)It is used to identify inventory safety stocks.
• C)It is used to slow down the collection of cheques a firm writes.
• D)It is used to speed up the collection of cheques received.

---

Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or services, used for cost allocation and operational planning.

Standard

A level of quality or achievement, especially one that is used as a point of reference.

Budget

An estimation of revenue and expenses over a specified future period of time, used by organizations for planning and controlling their financial resources.

Standard Cost

A predetermined cost of manufacturing, selling, or administering each product or service, used as a benchmark to measure performance.