CM Enterprises estimates that it takes, on average, seven days for their customers' payments to reach them, one day for the payments to be processed and deposited by their bookkeeping department, and three more days for the check to clear once they're deposited. What is their collection float?
A) 11 days
B) 10 days
C) 8 days
D) 7 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: 7 days (payments reach) + 1 day (processing and depositing) + 3 days (check clearing) = 11 days.

CM Enterprises Estimates That It Takes, on Average, Seven Days