Which of the Following Best Describes the Collection Float

question 15

Multiple Choice

Which of the following best describes the collection float?

• A)how long it takes the firm to receive the cheque after the customer has mailed it
• B)how long it takes the firm to process the cheque and deposit it in the bank
• C)how long it takes before the bank gives the firm credit for the funds
• D)how long it takes for a firm to be able to use funds after a customer has paid for its goods
• E)how long it takes before payments to suppliers actually result in cash outflow for the firm

---

Definitions:

Increase

To make or become greater in size, amount, intensity, or degree.

Rent

The payment made by a tenant to use property owned by someone else for a predefined period.

Hourly Rate

A set amount that an employee is paid for each hour of work.

Estimate

A rough calculation or educated guess of a figure based on available information.