What is a lockbox plan?
A) It is used for safe-keeping cash and marketable securities.
B) It is used to identify inventory safety stocks.
C) It is used to slow down the collection of cheques a firm writes.
D) It is used to speed up the collection of cheques received.

Question

Quizplus · Accepted Answer

A lockbox plan is a method of speeding up the collection of cheques received by having them sent directly to a post office box managed by a third-party bank. The bank deposits the funds and notifies the firm, thus reducing the time and cost of manual processing.

What Is a Lockbox Plan