PBJ Enterprises estimates that it takes, on average, three days for their customers' payments to reach them, three days for the payments to be processed and deposited by their bookkeeping department, and three more days for the checks to clear once they're deposited. What is their collection float?
A) 5 days
B) 6 days
C) 9 days
D) 18 days

Question

Quizplus · Accepted Answer

The collection float is the total time from when a customer sends their payment to when the funds are available in the company's account. Adding the days for each step (3 days for payments to reach the company, 3 days for processing and depositing, and 3 days for the checks to clear) gives a total of 9 days.

PBJ Enterprises Estimates That It Takes, on Average, Three Days