Asked by Ragena Riley on Jul 23, 2024
Verified
Your average customer is located 3 mailing days away from your firm. In addition, it takes 1 day for your funds to be available for use once you have made your bank deposit. You have determined that your total collection time is 8 days. How long on average is it taking your firm to process the payments from your customers?
A) 2 days
B) 3 days
C) 4 days
D) 7 days
E) 8 days
Collection Time
The standard timeframe a business needs to obtain amounts owed by its customers.
Mailing Days
Mailing Days are business days considered when estimating the delivery time for postal and courier services, excluding weekends and holidays.
Bank Deposit
Money placed into a banking institution for safekeeping, which can include savings accounts, checking accounts, and certificates of deposit.
- Figure out the entire timeframe for the organization's collection activities, considering a variety of elements that dictate the efficiency of check processing and clearing.
Verified Answer
LS
Liang SheenaJul 24, 2024
Final Answer :
C
Explanation :
The total collection time is the sum of the mailing time, processing time, and the time it takes for funds to be available. Given a total collection time of 8 days, a mailing time of 3 days, and 1 day for funds to be available, the processing time is calculated as 8 - 3 - 1 = 4 days.
Learning Objectives
- Figure out the entire timeframe for the organization's collection activities, considering a variety of elements that dictate the efficiency of check processing and clearing.