Due to the extended Christmas holiday season, checks received by firms are not d

Question

Due to the extended Christmas holiday season, checks received by firms are not deposited for several days. This represents an increase in the ______________ float for the depositing firm. A) ledger B) collection C) clearing D) net E) disbursement Due to the extended Christmas holiday season, checks received by firms are not deposited for several days. This represents an increase in the ______________ float for the depositing firm. A) ledger B) collection C) clearing D) net E) disbursement A) ledger B) collection C) clearing D) net E) disbursement A) ledger B) collection C) clearing D) net E) disbursement

Explanation / Answer

Collection floating can be defined as a situation when a firm receives a check, so it's accounting book balance increase but it's available balance remain unchanged until this check is cleared by the bank.

Hence it can be said that when due to the extended Christmas holiday season, checks received by firms are not deposited for several days. This represents an increase in the collection float for the depositing firm.

Hence option B is the correct answer.

Option B ; collection.

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