Which One of These Statements Correctly Applies to a Lockbox

question 8

Multiple Choice

Which one of these statements correctly applies to a lockbox system of cash collections?

• A)Mailing time is reduced while the collection time remains constant.
• B)Electronic lockboxes have totally replaced traditional lockbox systems.
• C)Checks can be deposited prior to the payments being applied to the customers' accounts.
• D)Mailing time is reduced but the processing delay is increased.
• E)Checks are held by the bank until the payee firm approves them to start the check-clearing process.

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Definitions:

Marginal Ordinary Income Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, increasing progressively as your income surpasses threshold amounts.

Qualified Dividends

Dividend payments received on shares of a corporation, taxed at a lower tax rate than regular income.

Tax Rate

The percentage at which an individual or corporation is taxed.

Constructive Receipt

The tax principle that income is taxed when it is actually or constructively received, not necessarily when it is earned.