Asked by Albatool Ahmed on Jul 14, 2024
Verified
A firm has $18,020 in outstanding cheques that have not cleared the bank. The firm also has $23,500 in deposits that have been recorded by the firm but not by the bank. The current available balance is $2,640. What is the status of the net float?
A) Net collection float of $2,840.
B) Net collection float of $5,480.
C) Net collection float of $8,120.
D) Net disbursement float of $2,840.
E) Net disbursement float of $5,480.
Net Collection Float
The net collection float is the time difference between when a check is deposited into a bank account and when the funds become available for use, essentially measuring the delay in bank processing.
- Evaluate the net float and its influence on an organization's management of cash.
Verified Answer
KN
Kinsey NyahozaJul 15, 2024
Final Answer :
B
Explanation :
Net collection float = Deposits in transit - Outstanding cheques = $23,500 - $18,020 = $5,480.
Learning Objectives
- Evaluate the net float and its influence on an organization's management of cash.