In Which Situation Below Would a Lock-Box System Likely Produce

question 76

Multiple Choice

In which situation below would a lock-box system likely produce greater benefits?

• A) when interest rates are very low
• B) when interest rates are very high
• C) when the firm's customers are concentrated locally
• D) when the firm collects with ACH transfers

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Definitions:

Trial Balance

A bookkeeping report that lists the balances of all ledgers in two columns, debits and credits, which should equal to ensure accuracy in accounts.

Trial Balance

A report listing all accounts and their balances at a particular date, used to ensure the total debits equal total credits in the accounting system.