Asked by Vianny Encalada on Jul 22, 2024
Verified
Due to a flood in the Canadian prairies, cheques drawn on the banks in the affected area are delayed several days in reaching the payees' banks for payment. This represents an increase in _____________ float for the firms writing the cheques.
A) Ledger.
B) Target.
C) Minimum.
D) Collection.
E) Disbursement.
Disbursement Float
The interval when funds are disbursed from a payer's account until the payee's bank credits the amount.
Ledger Float
The time difference between when a check is written and when it is actually deducted from the payer's account.
Collection Float
The time period between when a check is deposited into a bank account and when the funds are available.
- Gain insight into the fundamentals and relevance of collection and disbursement float for effective cash management.
- Learn the effects of environmental factors on float management.
Verified Answer
CQ
Claudia QuezadaJul 22, 2024
Final Answer :
E
Explanation :
This scenario describes an increase in disbursement float, which is the time delay between when a cheque is written and when the funds are actually withdrawn from the payer's account.
Learning Objectives
- Gain insight into the fundamentals and relevance of collection and disbursement float for effective cash management.
- Learn the effects of environmental factors on float management.