Lockbox Arrangements for the Collection of Cash Have Which of the Following

question 85

Multiple Choice

Lockbox arrangements for the collection of cash have which of the following as an advantage?

• A)The manual processing associated with maintaining control of the receipts is now shifted to a computer.
• B)Cash is deposited directly into the bank.
• C)The bank usually establishes only one lockbox geographically next to the client to minimize delay in collections.
• D)Eliminates the customer decision for the due date of payment.

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Definitions:

Finished Goods Inventory

The direct materials costs, direct labor costs, and factory overhead costs of finished products that have not been sold.

Manufacturing Business

A type of business that uses components, parts, or raw materials to make a finished good or product.

Job Order Cost System

An accounting method used to accumulate costs for each individual job or project, providing detailed cost tracking.

Organization's Cost Performance

The measure of how efficiently an organization controls its expenses in relation to its revenues or operational activities.