lockbox plan is
A) used to identify inventory safety stocks.
B) used to slow down the collection of checks our firm writes.
C) used to speed up the collection of checks received.
D) used primarily by firms where currency is used frequently in transactions, such as fast food restaurants, and less frequently by firms that receive payments as checks.
E) used to protect cash, i.e., to keep it from being stolen.

Question

Quizplus · Accepted Answer

A lockbox plan is used to speed up the collection of checks received. The lockbox plan involves setting up a special mailbox at a post office or at a bank, where customers can send their payments. The payments are processed by the bank and the funds are deposited directly into the firm's account, thus speeding up the collection process.

Lockbox Plan Is