Disbursement Float Results from the Delay Between the Time That

question 193

True/False

Disbursement float results from the delay between the time that a payer or customer deducts a payment from its checking account ledger (disburses it) and the time that the payee or vendor actually receives these funds in a spendable form.

---

Definitions:

Allowance for Doubtful Accounts

A contra-account reduced from accounts receivable on a company's balance sheet that represents the amount of sales that are expected not to be collected.

Accounts Receivable

Debts that customers have towards a business for items or services received but payment is outstanding.

Interest Calculation

The process of determining the interest charge on a loan or financial investment, based on the principal amount, rate, and time.

Maturity Date

The specific date on which the principal amount of a debt instrument, such as a bond or loan, becomes due and payable.