Efficient Funds Management Attempts to Reduce Mailing and Clearing Time

question 15

Multiple Choice

Efficient funds management attempts to reduce mailing and clearing time.Two methods do this by:

• A)moving collections and deposits closer together in concentration banks; and moving surplus funds quickly by wire transfers.
• B)moving mailing points to cross country locations and using depository drafts to transfer funds.
• C)drawing checks against zero balance accounts and using cross country mailing.
• D)wiring funds to zero balance accounts and using lockboxes in many cities.
• E)None of the above.

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Definitions:

Ordinary Gain

A gain resulting from the sale or exchange of assets that are not capital assets, taxed at ordinary income tax rates.

Profit

The amount of revenue that remains after deducting the expenses, taxes, and costs associated with generating that revenue.

Operating Leases

Leases where the lessor retains substantial risks and rewards of ownership of the asset while leasing it to the lessee.

Note Disclosure

Informative notes accompanying financial statements, explaining the basis of preparation and detailing specific accounting policies.