__________refers to funds that have been dispatched by a payer but are not in a form that can be spent by the payee.
A) Float
B) Lockboxes
C) The cash conversion cycle
D) A direct send

Question

Quizplus · Accepted Answer

Float refers to the time delay between when a payment is initiated by the payer and when it is received and processed by the payee. During this time, the funds are in transit and are not yet available for use by the payee. This delay can be caused by factors such as processing times or clearing periods for checks or electronic payments. Therefore, choice A is the best answer.

Lockboxes (choice B) are a collection method for receiving payments, but do not directly relate to the concept of funds in transit. The cash conversion cycle (choice C) refers to the time it takes for a company to convert its resources into cash, and also does not directly relate to funds in transit. A direct send (choice D) is not a commonly used financial term, and does not relate to the concept described in the question.

__________Refers to Funds That Have Been Dispatched by a Payer