The Difference Between a Lockbox System and a Mail-Based System

question 81

Multiple Choice

The difference between a lockbox system and a mail-based system is

• A) that a mail-based system is more secure.
• B) that a lockbox system is really a post office box that is emptied by the firm's bank.
• C) that a lockbox system requires a larger in-house collection system for the firm.
• D) none of the above.

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Definitions:

Loss on Discontinuance

A financial loss that occurs as a result of the cessation of a business unit or operation.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in using its assets to generate sales.

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects receivables or the speed of their customer payments.