CHIPS Refers to the Payment System That

question 8

Multiple Choice

CHIPS refers to the payment system that

• A)handles interbank transactions needed to settle international transactions
• B)is equivalent to an ACH system but is solely used for security transactions
• C)exclusively clears bounced checks that are drawn on foreign banks
• D)handles only transactions between various countries' governments or their agencies

---

Definitions:

Net Positive Float

The excess of funds available for use due to the time difference between when a check is deposited and when it clears.

JIT System

Just-In-Time System, an inventory management strategy that aligns raw-material orders directly with production schedules.

Accounts Payable

The amounts a company owes to its suppliers or vendors for goods or services received but not yet paid for; a liability on the balance sheet.

Collections Float

Float created while funds from customers’ cheques are being deposited and cleared through the cheque collection process.