Which statement is correct? Select one: A. Firms prefer to increase processing delay on disbursements. B....

Which statement is correct?

Select one:

A. Firms prefer to increase processing delay on disbursements.

B. Firms prefer to eliminate all types of float.

C. The Check Clearing Act for the 21st Century is designed to reduce total collection time to one day.

D. Firms cannot use lockboxes if they use cash concentration accounts.

E. Firms open regional offices so their employees can pick up lockbox payments throughout the day.

Solutions

Expert Solution

Correct option: A. Firms prefer to increase processing delay on disbursements.

Reason: An increase in the accounts payable period will decrease the cash cycle.

Option B is not correct . Firms prefer to eliminate all types of float

Disbursement float causes the available balance to exceed the ledger balance.

Option C is not correct. The Check Clearing Act for the 21st Century is designed to reduce total collection time to one day.

The Check Clearing for the 21st Century Act facilitates the use of technology to reduce or eliminate the costs involved with paper check processing

Option D is not correct.

A lockbox is a bank-operated mailing address to which a company directs its customers to send their payments.Cash Concentration allows to centralize your cash from multiple accounts and banks into a combined account, enabling greater oversight and visibility into the cash position. So firms can use lockboxes with cash concentration solution.

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jeff jeffy answered 1 year ago

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