Which of the Following Is True of Collection Float

question 209

Multiple Choice

Which of the following is true of collection float?

• A) It represents the time delay between when payment is placed in the mail and when it is received.
• B) It represents the time between receipt of a payment and its deposit into a firm's account.
• C) It results from the lapse between the time when a firm deducts a payment from its checking account ledger and the time when funds are actually withdrawn from its account.
• D) It results from the delay between the time when a customer deducts a payment from the checking account ledger and the time when the vendor actually receives the funds in a spendable form.

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Definitions:

Contingency Planning

Taking into account the managerial options that are implicit in a project.

Abandonment

In business, this refers to the decision to stop developing, producing, or pursuing an asset, project, or product line, often due to it being unprofitable.

Average Total Cost

The total cost of production divided by the number of goods produced, representing the cost per unit of product.