Which One of the Following Statements About Collection Time Is

question 47

Multiple Choice

Which one of the following statements about collection time is NOT true?

• A) Collection time, or float, is the time between when a customer makes a payment and when the cash becomes available to the company.
• B) Collection time can be broken down into three components.
• C) Delivery time or mailing time is not part of the float.
• D) Processing delay is part of the collection time.

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Definitions:

Loss

The negative financial result from an investment or business operations, where expenses exceed revenues.

Regulatory Lag

The delay between the identification of a need for regulatory intervention and the implementation of regulatory policies or actions.

Rate-Of-Return Regulation

Maximum price allowed by a regulatory agency is based on the (expected) rate of return that a firm will earn.

Economic Efficiency

A state where resources are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.