Taking Together the Results in Figure Q10-37, What Is the Interpretation

question 25

Essay

Taking together the results in Figure Q10-37, what is the interpretation of these results?

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Definitions:

Collection Float

The time period between when a check is deposited into a bank account and the time the funds are available to the depositor.

Mailing Time

The duration it takes for correspondence to be delivered from the sender to the recipient.

Collection Float

The time period between when a check is deposited and when the funds become available in the recipient's account.

Net Float

Net float is the difference between the amount of checks written by a company and the amount that has been cleared and charged to the company's account, affecting its available balance.