Asked by Beyza Albayrak on Jul 18, 2024
Verified
Disbursement float increases as the:
A) Average amount of each cheque written decreases.
B) Time period required for the mail to be delivered to each payee increases.
C) Average processing time required by the payees decreases.
D) Excess cash in the chequing account increases.
E) Clearing process becomes more efficient.
Average Cheque
The average amount of money received or paid in transactions, commonly used in banking and retail settings.
Mail Delivery
The system of transporting and distributing letters and packages from senders to recipients.
Processing Time
The amount of time taken to complete a particular process, task, or operation.
- Appreciate the fundamental significance of handling collection and disbursement floats for effective cash management.
Verified Answer
SP
Sunny PatelJul 22, 2024
Final Answer :
B
Explanation :
Disbursement float increases with the time it takes for a cheque to be delivered and processed. When the delivery time to payees increases, it takes longer for funds to be withdrawn from the payer's account, thus increasing the disbursement float.
Learning Objectives
- Appreciate the fundamental significance of handling collection and disbursement floats for effective cash management.