A lockbox plan is
A) A method for safe-keeping of marketable securities.
B) Used to identify inventory safety stocks.
C) A system for slowing down the collection of checks written by a firm.
D) A system for speeding up a firm's collections of checks received.
E) Not described by any of the statements above.

Question

Quizplus · Accepted Answer

A lockbox plan is a system for speeding up a firm's collections of checks received. It involves having the firm's customers send their payments directly to a post office box that is monitored by a bank. The bank collects the payments, processes them, and deposits the funds into the firm's account. This can help to reduce the time it takes for the firm to receive and process payments, improving its cash flow and reducing the risk of fraud or theft.

A Lockbox Plan Is